The Talk Show

00:00:00 ◼   ► Matthew Panzareno welcome welcome back to the show. Thank you sir. Thanks for having me. Wow. It's a tough week to have a show. There's no news

00:00:07 ◼   ► Yeah, we might as well just shut it down go on vacation

00:00:14 ◼   ► Man yeah, it's been like that every day so

00:00:20 ◼   ► We are recording on Tuesday the 31st. So we are literally talking like two hours after Apple posted

00:00:28 ◼   ► Quarterly results so we can actually do like a news show. It's like we're like on on CNN or something talking about breaking news

00:00:35 ◼   ► Right this week's news today or whatever. Yeah, so that yesterday

00:00:40 ◼   ► Summarizing the quarterly results, I think it's my summary is more or less

00:00:50 ◼   ► iPhone went back to growth which was contrary to

00:00:55 ◼   ► Some predictions that that that last year's dip was was the sign that that we'd reached a peak iPhone

00:01:03 ◼   ► People say they sold more iPhones last quarter than they've ever sold in any quarter including the two year ago one when the sales went

00:01:10 ◼   ► bananas because of the

00:01:12 ◼   ► iPhone 6 and 6 plus

00:01:14 ◼   ► iPad sales are down a little bit year over year, but they're

00:01:20 ◼   ► reasonably saying, well, last year they came out

00:01:23 ◼   ► with the brand new iPad Pro.

00:01:24 ◼   ► This year there were no new iPads in the holiday quarter,

00:01:26 ◼   ► and they're still a respectable 13 million.

00:01:29 ◼   ► Mac sales were up a little, rebounding,

00:01:33 ◼   ► I think showing good signs of probably

00:01:36 ◼   ► the new MacBook Pro sales being pretty good.

00:01:39 ◼   ► Apple Watch, they don't break those out,

00:01:42 ◼   ► but on the conference call, it sounded to me,

00:01:45 ◼   ► reading the summary, that they said

00:01:47 ◼   ► it was a record-breaking quarter.

00:01:50 ◼   ► And that makes sense because it's the holiday quarter

00:01:52 ◼   ► and I think that it's,

00:01:54 ◼   ► if they did break those watch sales out,

00:01:56 ◼   ► I think the holiday quarter is gonna be a huge spike,

00:01:59 ◼   ► just like in the old days, the way iPods were.

00:02:02 ◼   ► And then last but not least, services,

00:02:04 ◼   ► Apple's favorite word of the last two years is up.

00:02:07 ◼   ► Is that a fair summary?

00:02:10 ◼   ► - Yeah, I think so.

00:02:12 ◼   ► I mean, I think there's some question

00:02:13 ◼   ► about that other category,

00:02:15 ◼   ► in like the overall other category.

00:02:18 ◼   ► There was a dip in growth, but the general consensus

00:02:22 ◼   ► is the watch did fine in the quarter.

00:02:24 ◼   ► - Right.

00:02:26 ◼   ► - I mean, it's pretty much the only watch

00:02:27 ◼   ► that's doing anywhere near decent right now,

00:02:29 ◼   ► so it's not too hard to say that.

00:02:33 ◼   ► - Yeah, and it seems to me like, I mean, there's a lot of,

00:02:37 ◼   ► I mean, this is a little off topic of Apple's quarter,

00:02:39 ◼   ► but it's on point with the watch that I'm starting to see

00:02:43 ◼   ► some serious repeated pessimism about Fitbit,

00:02:48 ◼   ► that Fitbit, I think, might be,

00:02:51 ◼   ► as a company, might be in trouble.

00:02:53 ◼   ► - Yes, yeah, I think that's pretty clear

00:02:55 ◼   ► from what we've been hearing so far.

00:02:58 ◼   ► I think that there's a significant change in direction,

00:03:01 ◼   ► what we refer to here in Silicon Valley as pivot,

00:03:05 ◼   ► coming for them, but yeah, there's,

00:03:08 ◼   ► they are definitely, and I don't think anybody

00:03:10 ◼   ► really thinks that it's completely about the products.

00:03:14 ◼   ► I mean, I think there's plenty of quality issues

00:03:15 ◼   ► they've had over the years,

00:03:16 ◼   ► and they've never been super highly rated

00:03:21 ◼   ► as far as durability and longevity and quality.

00:03:24 ◼   ► And they've had a couple of actual real problems

00:03:26 ◼   ► with quality, but I think it's just a tough category

00:03:29 ◼   ► and they just didn't quite figure it out.

00:03:32 ◼   ► - Yeah, it's like they stand alone

00:03:37 ◼   ► as the only independent company

00:03:41 ◼   ► that's making fitness trackers

00:03:43 ◼   ► that is worth even talking about,

00:03:45 ◼   ► but it doesn't seem like they've got it over the hump.

00:03:48 ◼   ► And it's, I think in particular, Apple Watch is doing them in

00:03:52 ◼   ► that in this casual market, in this casual market

00:03:56 ◼   ► of people who wanna spend like, let's say,

00:03:58 ◼   ► somewhere around two, $300 to track their fitness,

00:04:02 ◼   ► it seems to me like Apple Watch is starting to get

00:04:05 ◼   ► real traction outside the early adopters market,

00:04:09 ◼   ► and I think it's at Fitbit's expense.

00:04:13 ◼   ► yeah and it's sort of the

00:04:16 ◼   ► you know you bought a phone

00:04:18 ◼   ► may used to be a main made for four five years ago you bought a phone make phone

00:04:21 ◼   ► calls and maybe you write text messages

00:04:24 ◼   ► and you got all these apps with it

00:04:25 ◼   ► you know i know it's not a stop and then you come to love that and

00:04:28 ◼   ► pretty soon you're not making phone calls at all you texting everybody with

00:04:31 ◼   ► you know messenger or whatever

00:04:33 ◼   ► but i think it's the same kind of concept you know so people are saying

00:04:35 ◼   ► hey you know now the price is getting to where

00:04:39 ◼   ► i don't mind spending two hundred box

00:04:41 ◼   ► getting this thing and getting all these other things with it but it's a great

00:04:44 ◼   ► you know so solid fitness tracker that they can do all these things so

00:04:48 ◼   ► as a category and union as you mentioned it

00:04:51 ◼   ► you knows treading alone on the backs of that

00:04:54 ◼   ► one p_m_l_ right

00:04:55 ◼   ► right so if you break out the apple watch is a business especially that

00:04:58 ◼   ► first launch quarter when it launched

00:05:01 ◼   ► i mean that stuff takes ramp time

00:05:04 ◼   ► and when it's you're relying on yourself in your own revenues and whatever you

00:05:07 ◼   ► know venture capital obviously you have

00:05:09 ◼   ► you don't have

00:05:10 ◼   ► infinite runway, you know?

00:05:13 ◼   ► - Yeah, and I think, we'll come back to this

00:05:16 ◼   ► on another topic in a bit, but I'm as guilty of it,

00:05:21 ◼   ► maybe not as anybody, but I know I'm guilty of it,

00:05:26 ◼   ► and I think others who write about technology

00:05:28 ◼   ► are seriously guilty of being too focused on the short term

00:05:33 ◼   ► and not realizing how long some things need

00:05:40 ◼   ► to really get mainstream acceptance.

00:05:42 ◼   ► Like just smartphones, period.

00:05:45 ◼   ► It was like, remember the, what was the initial goal?

00:05:48 ◼   ► It was like 10 million iPhones in the first year of sales,

00:05:52 ◼   ► something like that.

00:05:53 ◼   ► And they made it, but it's like if you think about that now,

00:05:59 ◼   ► they sold 78 million phones in three months

00:06:03 ◼   ► this last quarter.

00:06:04 ◼   ► And whereas back when it first came out 10 years ago,

00:06:08 ◼   ► It was, we're hoping for 10 million in 12 months.

00:06:12 ◼   ► It takes a long time.

00:06:14 ◼   ► And a part of it is just the simple common sense,

00:06:16 ◼   ► and I mean, other people have written about it,

00:06:18 ◼   ► but just, there are people like me

00:06:21 ◼   ► who will go and buy an iPhone on the day it comes out.

00:06:24 ◼   ► But most people, even if they were curious,

00:06:26 ◼   ► and I still remember it with the original iPhone,

00:06:28 ◼   ► where people on the street would see me using it,

00:06:30 ◼   ► and they would say, without knowing who I am,

00:06:33 ◼   ► they would just say, "Is that an iPhone?"

00:06:35 ◼   ► Right?

00:06:36 ◼   ► And they were obviously aware of it.

00:06:38 ◼   ► They probably have one now,

00:06:39 ◼   ► but it took years for them to be comfortable to say,

00:06:42 ◼   ► "Okay, I'll get one."

00:06:43 ◼   ► 'Cause there's like a comfort factor of knowing it.

00:06:46 ◼   ► And I think the watch is on that trajectory.

00:06:49 ◼   ► - Yeah, I think so.

00:06:53 ◼   ► I mean, I think I've definitely had,

00:06:54 ◼   ► right now it's exited that phase for me.

00:06:59 ◼   ► It's not like people see it on my wrist and go,

00:07:02 ◼   ► oh my God, is that an Apple Watch?

00:07:03 ◼   ► But what they do say is,

00:07:05 ◼   ► "Oh, you know, I'm thinking about getting it. Are you still using it?"

00:07:08 ◼   ► Which is an interesting way to phrase it, right? And I think that that's

00:07:11 ◼   ► partially from the narrative, you know,

00:07:15 ◼   ► I guess you could call it media narrative or whatever,

00:07:19 ◼   ► that the watch isn't all that useful long-term, that there's an initial

00:07:23 ◼   ► wave of like, "Oh hey, I'm poking around," and then eventually you get tired of it and put it away.

00:07:27 ◼   ► And I definitely know that

00:07:29 ◼   ► there are plenty of people that don't wear those anymore or whatever, right? There's

00:07:32 ◼   ► going to be that with any gadget. It doesn't fit

00:07:34 ◼   ► either what the company tried to sell you it was, or whatever their success or failure

00:07:41 ◼   ► in communicating what it was was, or your own vision of how it would fit into your life

00:07:45 ◼   ► didn't quite match up with how it actually did.

00:07:49 ◼   ► So I think that we've exited that phase, and now we're in a phase where the people that

00:07:54 ◼   ► are still wearing it are advocating in ways that are more specific.

00:07:57 ◼   ► They're like, "Yes, I love it because X, Y."

00:08:00 ◼   ► It's not like, "Oh yeah, I love it."

00:08:03 ◼   ► And then like, "What do you like about it?"

00:08:04 ◼   ► "Oh, I look at all these things and this thing and that thing."

00:08:06 ◼   ► I don't think we're out of that.

00:08:09 ◼   ► These are the practical benefits it offers me.

00:08:11 ◼   ► "Oh yeah, I have all my calendar stuff on there."

00:08:14 ◼   ► That's enough for most people.

00:08:15 ◼   ► Or it's a great fitness tracker.

00:08:17 ◼   ► I go to the gym every day or I cycle or I swim, etc.

00:08:22 ◼   ► People are figuring out the things that work for them.

00:08:25 ◼   ► And so it's more about the precise benefits on an individual basis versus the entire bolus

00:08:34 ◼   ► of benefits that could theoretically apply to you.

00:08:38 ◼   ► And I think that that could be where the sustained growth

00:08:42 ◼   ► is coming from versus the initial wave of who knows.

00:08:44 ◼   ► - Yeah, it's also true that, I mean, we knew this.

00:08:47 ◼   ► This isn't something we needed to hear from Tim Cook

00:08:50 ◼   ► on the conference call today.

00:08:51 ◼   ► You could tell just by going to the Apple store

00:08:53 ◼   ► and trying to buy an Apple Watch that they were backordered

00:08:57 ◼   ► for most of the last quarter, or still are, I think,

00:09:01 ◼   ► that they couldn't make them fast enough,

00:09:03 ◼   ► Which is a good sign, I guess.

00:09:05 ◼   ► - Yeah, I mean, I think initially, you know,

00:09:09 ◼   ► you never know whether they just didn't know

00:09:11 ◼   ► how many to make or what, or whether they didn't know

00:09:13 ◼   ► what the right mix was.

00:09:15 ◼   ► - Right.

00:09:16 ◼   ► - I think initially there was a lot more people

00:09:17 ◼   ► buying steel than maybe they thought.

00:09:20 ◼   ► And so there was, you know, it's incredibly hard

00:09:21 ◼   ► to get steel ones for a long time.

00:09:23 ◼   ► But now I think they're getting the mix figured out.

00:09:25 ◼   ► So if they have the mix figured out, that eliminates that.

00:09:28 ◼   ► And now you are looking at, yeah,

00:09:31 ◼   ► they're just having a hard time keeping up with it,

00:09:33 ◼   ► which theoretically should be a good thing.

00:09:36 ◼   ► On the flip side, they aren't keeping up with it,

00:09:38 ◼   ► so they're not selling as many as they could,

00:09:39 ◼   ► which is not great for your shareholders

00:09:42 ◼   ► or whatever you wanna call it.

00:09:43 ◼   ► - With iPhone sales rebounding

00:09:47 ◼   ► and actually growing and breaking a record,

00:09:49 ◼   ► even with that, even saying it's a record,

00:09:54 ◼   ► it's clear, it's a few fractions of a percentage.

00:09:59 ◼   ► I think at 78 million they sold into one two years ago

00:10:02 ◼   ► that was the previous record was like 74 million phones

00:10:05 ◼   ► or something like that.

00:10:06 ◼   ► So the years of rah-rah 50% growth year over year are over.

00:10:11 ◼   ► And I think that common sense would tell you why.

00:10:15 ◼   ► It's because the smartphone is sort of a saturated product.

00:10:19 ◼   ► I mean, not that there's no room for growth

00:10:22 ◼   ► in certain markets, but for the most part,

00:10:24 ◼   ► over the last 10 years, we've reached the point

00:10:26 ◼   ► where almost everybody who might get a smartphone

00:10:30 ◼   ► has a smartphone.

00:10:31 ◼   ► - Right.

00:10:34 ◼   ► Well, I mean, I think,

00:10:35 ◼   ► it looks like there was some declines in China,

00:10:39 ◼   ► but every other market grew,

00:10:41 ◼   ► which is, that's pretty solid.

00:10:45 ◼   ► I mean, China is its own beast.

00:10:47 ◼   ► You know, it's incredibly difficult to do business there,

00:10:49 ◼   ► as Apple has found over the years, you know,

00:10:51 ◼   ► and we only know the public stuff.

00:10:53 ◼   ► We don't know the many challenges they've come up,

00:10:56 ◼   ► against with the government and everything else that don't quite make it to the page.

00:11:01 ◼   ► But outside of that, every other region was growing. And I think that people think of

00:11:06 ◼   ► saturation and replacement cycles and things like that. The people that do think of those

00:11:12 ◼   ► things are not, they're not communicating it well or I should say that they communicate

00:11:17 ◼   ► it fine in their vein. But it's hard to characterize those things and turn them into very human,

00:11:26 ◼   ► you know, sentences or ideas or concepts for people that can help them understand where

00:11:32 ◼   ► the growth is coming from and where the sustained growth will come from.

00:11:35 ◼   ► Because it's like you could say, "Hey, every X years, people are going to replace their

00:11:40 ◼   ► iPhone and that changes based on major design changes, right?"

00:11:44 ◼   ► So in a major design change year, the replacement cycle may be lowered by 30%.

00:11:49 ◼   ► And then you can also go to like, you know, there's new people being born, so people are

00:11:53 ◼   ► are turning what, 12 or 13 or 14 now,

00:11:57 ◼   ► that were just born when the iPhone came out

00:12:02 ◼   ► and they're getting phones.

00:12:03 ◼   ► So we're getting into the first wave of,

00:12:06 ◼   ► I don't know, new iPhone consumers,

00:12:09 ◼   ► first generation of new iPhone consumers.

00:12:11 ◼   ► So there are lots of factors.

00:12:12 ◼   ► It's a very liquid thing.

00:12:14 ◼   ► And everybody treats it like,

00:12:15 ◼   ► oh yeah, everybody that has a phone,

00:12:18 ◼   ► has one, wants one, and that's it.

00:12:20 ◼   ► But I think Apple is looking at growth

00:12:21 ◼   ► in terms of all of these variables,

00:12:24 ◼   ► and the projections show, revenue projection,

00:12:27 ◼   ► guidance-wise, it's like 51, I guess,

00:12:30 ◼   ► to 53 billion, something like that,

00:12:32 ◼   ► that they're projecting, which is not crazy high,

00:12:35 ◼   ► but not light by any means, and so I think that,

00:12:39 ◼   ► I think that they feel that they've got the growth

00:12:41 ◼   ► out there, in those pockets.

00:12:43 ◼   ► - And I think that, I think a lot of people saw,

00:12:50 ◼   ► Long story short, last year for the calendar year,

00:12:54 ◼   ► iPhone sales were down year over year.

00:12:56 ◼   ► The 6S seemingly didn't sell as,

00:12:59 ◼   ► or didn't sell as well as the 6.

00:13:02 ◼   ► And I say that, my only hesitation in saying that

00:13:05 ◼   ► is my presumption that most iPhones sold are the new,

00:13:09 ◼   ► the top of the line new model.

00:13:12 ◼   ► 'Cause you don't know, they don't break that down

00:13:14 ◼   ► for competitive reasons.

00:13:15 ◼   ► So in theory, they could've sold,

00:13:17 ◼   ► the iPhone SE could secretly be the best selling iPhone.

00:13:20 ◼   ► But anecdotally, it certainly seems

00:13:23 ◼   ► that that doesn't seem the way,

00:13:25 ◼   ► most people buy the best one.

00:13:28 ◼   ► I think some people saw last year's slight dip

00:13:32 ◼   ► and thought whether it was just to be dramatic

00:13:36 ◼   ► and make clickbait predictions,

00:13:39 ◼   ► but saw it as the beginning of a trend

00:13:42 ◼   ► as opposed to the counter argument was just that

00:13:46 ◼   ► it looked like a dip because the six was such an outlier

00:13:50 ◼   ► in terms of there having been so much pent up demand

00:13:53 ◼   ► for a quote unquote bigger iPhone.

00:13:55 ◼   ► And I think the numbers they just announced

00:14:01 ◼   ► for the iPhone 7 certainly back that up.

00:14:03 ◼   ► That it was just an outlier.

00:14:06 ◼   ► - Yeah, I think so.

00:14:07 ◼   ► I mean, I think the plus, I guess Tim said on the call

00:14:10 ◼   ► that the iPhone 7 Plus was the highest portion,

00:14:14 ◼   ► was a higher portion of the mix than in the past.

00:14:17 ◼   ► So that, you know, people are getting acclimated

00:14:20 ◼   ► to the larger phones, that increases their profit margins,

00:14:23 ◼   ► obviously, 'cause the larger phones don't cost them,

00:14:26 ◼   ► you know, whatever percent larger, whatever percent more

00:14:29 ◼   ► to make, and increases their ASP, their average selling

00:14:32 ◼   ► price, which is always a guidance point that like,

00:14:35 ◼   ► analysts love to look at, because it means that for every,

00:14:39 ◼   ► every amount of, ounce of effort they put into marketing,

00:14:41 ◼   ► or whatever the case may be, the return is higher,

00:14:45 ◼   ► 'cause you've got that individual unit

00:14:46 ◼   ► that's a higher price, and it really costs you

00:14:49 ◼   ► roughly the same amount to sell that

00:14:51 ◼   ► as it does anything else.

00:14:53 ◼   ► It's like growing a tall tree versus a short tree.

00:14:55 ◼   ► I mean, they're both trees, right?

00:14:57 ◼   ► So there's a definite positivity around that

00:15:02 ◼   ► that I've been seeing, that the bigger phones,

00:15:05 ◼   ► people are loving them, they're taking them up,

00:15:07 ◼   ► and they're buying more of them than ever.

00:15:10 ◼   ► It is interesting and I think Apple is pretty good at this stuff, but it's always interesting

00:15:17 ◼   ► to see them admit that their estimates were off.

00:15:21 ◼   ► And it's like you said, that they've admitted that the mix of the Plus to the non-Plus 7,

00:15:27 ◼   ► even though the regular iPhone 7, they said, was the best-selling model, the Plus sold

00:15:32 ◼   ► better this year than it has, I guess, in the previous two years.

00:15:35 ◼   ► And that's the highest mix of them, you know, then versus the other right?

00:15:40 ◼   ► Makes me wonder in particular if the the the camera in particular

00:15:46 ◼   ► I mean, it's gotta be right

00:15:49 ◼   ► I mean, yeah sure part of it is just getting used to bigger size

00:15:52 ◼   ► But the camera has to drive like X percent of it. Like I'm not I'm not pulling out a number

00:15:56 ◼   ► Let's say 30% of the decisions to buy that phone where oh, it's got the better camera. So let's get that one, right?

00:16:03 ◼   ► - Yeah, and it seems like something that

00:16:06 ◼   ► you can see it when you're in the store.

00:16:10 ◼   ► Like if you go in the store and you're on the fence

00:16:12 ◼   ► over whether to get an iPhone 7 or 7 Plus,

00:16:15 ◼   ► starting this year, you can tell just by looking,

00:16:18 ◼   ► without even trying the camera, it looks different, right?

00:16:21 ◼   ► It's double the size.

00:16:22 ◼   ► It looks like, you know, you can see that it has,

00:16:26 ◼   ► like the previous years, the Plus models

00:16:28 ◼   ► had the optical image stabilization.

00:16:30 ◼   ► Starting with the 6, it was for stills,

00:16:33 ◼   ► and then the success added it for video.

00:16:37 ◼   ► That's a great feature, especially for video.

00:16:41 ◼   ► I mean, it's almost unbelievable how good

00:16:45 ◼   ► some of my little home family videos come out now

00:16:48 ◼   ► because of image stabilization on video.

00:16:51 ◼   ► But you can't see it in the store,

00:16:56 ◼   ► so it's just a bullet point, and everybody is, I think,

00:17:01 ◼   ► you build up an immunity to bullet points

00:17:04 ◼   ► because every time you buy anything,

00:17:05 ◼   ► whether it's a car or a toaster oven,

00:17:09 ◼   ► everything has bullet points.

00:17:11 ◼   ► Here's the features that your coffee maker has.

00:17:14 ◼   ► 12 cups has an alarm.

00:17:17 ◼   ► - Makes coffee. - Right, makes coffee.

00:17:19 ◼   ► Whereas you just look at the back of the 7 Plus

00:17:25 ◼   ► and the idea that the camera is better on this one

00:17:29 ◼   ► than the smaller one, it seems visceral

00:17:31 ◼   ► because you just look at it.

00:17:32 ◼   ► I can't help but think that that actually successfully

00:17:35 ◼   ► bumped sales of this, which in turn makes me think

00:17:39 ◼   ► that if, you know, they may not be done,

00:17:43 ◼   ► this might just be the start of the bigger,

00:17:46 ◼   ► more expensive iPhone having tangibly better

00:17:49 ◼   ► camera technology, just because it seems like it's proof

00:17:53 ◼   ► that it can drive sales.

00:17:54 ◼   ► - I think you're right.

00:17:56 ◼   ► There are two things that I think are really driving this.

00:18:00 ◼   ► I'm 100% agree that the difference could actually,

00:18:03 ◼   ► the physical difference, the way it looks,

00:18:05 ◼   ► could definitely make a big difference.

00:18:08 ◼   ► You're right on there.

00:18:09 ◼   ► I know there will be people that listen to this

00:18:12 ◼   ► and they'll laugh, they'll be like, oh yeah,

00:18:14 ◼   ► people are just looking at the back of it

00:18:15 ◼   ► and going, oh yeah, this one's bigger,

00:18:17 ◼   ► got a bigger camera thingy on it and I'm gonna buy that.

00:18:20 ◼   ► But I think people would be shocked,

00:18:23 ◼   ► especially people that listen to this show,

00:18:24 ◼   ► which the subset of people that are in the world

00:18:27 ◼   ► listed to the show. You know, how much higher technical savvy than average, probably do

00:18:33 ◼   ► a lot more research on products than average. You know, if you were doing a demographic

00:18:37 ◼   ► survey, I think that none of these things would be surprising, right? But I think people

00:18:41 ◼   ► underestimate very heavily how little research people do when they go to buy stuff in a store.

00:18:46 ◼   ► Like they'll go to the store to get a phone, not having looked at a single thing online

00:18:50 ◼   ► or asked anybody or whatever, and they'll just go and they'll just like, "I want the

00:18:55 ◼   ► the best along X or Y personal axis, you know?

00:19:00 ◼   ► Best camera or most storage or whatever, honestly,

00:19:03 ◼   ► whatever most recent problem they had

00:19:05 ◼   ► is probably how they pick.

00:19:07 ◼   ► And I've seen this myself, I used to work in big box retail

00:19:10 ◼   ► and I've sold a lot of different things over the years

00:19:13 ◼   ► but one of the times I was selling digital cameras,

00:19:17 ◼   ► especially, this was like early,

00:19:19 ◼   ► in the early digital camera days, very early.

00:19:21 ◼   ► And somebody comes in and is looking like a Mavica,

00:19:24 ◼   ► like a Sony Mavica, which is one of the ones that took the floppy disks. You would throw

00:19:28 ◼   ► those in there. And you know, they, honestly, nine times out of ten all they want is which

00:19:34 ◼   ► one has the biggest number on the box. They would literally look at the boxes and they

00:19:38 ◼   ► go, "Oh, this one has ten, that one has eight." And you're like, "Well, yes, but the one that's

00:19:42 ◼   ► -- I mean, if you're an honest person, you go, "The one that's eight that's slightly

00:19:46 ◼   ► less is actually better for you because, I don't know, it has this swivel thing and you

00:19:50 ◼   ► really need that for whatever you're doing. But if you don't have that person there, that

00:19:55 ◼   ► decision is getting made based on the number on the box, right? Hey, that's 10. This one's

00:19:59 ◼   ► 8. I'll get the 10, right? I have the money. That's fine. Let's go. And I think that people

00:20:04 ◼   ► make those decisions that way a lot more than most people think. And even though Apple store

00:20:10 ◼   ► employees are theoretically better informed than your average big box retailer, they don't

00:20:15 ◼   ► have the time. Apple stores are more crowded than ever. People are making decisions without

00:20:19 ◼   ► intervention by an employee and just asking the employee to set it up for them.

00:20:23 ◼   ► And hopefully the employee maybe intervenes at some point if they feel

00:20:26 ◼   ► it's the wrong product for them and tries to switch them to something that

00:20:29 ◼   ► is, but there's no guarantees. So I think that literally the physical difference

00:20:34 ◼   ► in the camera could make a real big difference for people because of those

00:20:38 ◼   ► reasons. And it seems silly or obvious or whatever, but people are silly

00:20:45 ◼   ► and obvious when they buy.

00:20:46 ◼   ► You know, that's just,

00:20:48 ◼   ► the vast majority of consumers are that way.

00:20:51 ◼   ► - And I think it's also telling how long

00:20:53 ◼   ► Apple has stuck with the shot on iPhone ad campaign.

00:20:58 ◼   ► You know, and Schiller said it when he was on my show,

00:21:02 ◼   ► I forget if it was last year or the first time,

00:21:05 ◼   ► two years ago, where I think it was--

00:21:07 ◼   ► - It's a name drop, I like it.

00:21:09 ◼   ► - But I asked him, like, I think it was two years ago,

00:21:12 ◼   ► 'cause I think last year it was so obvious

00:21:14 ◼   ► it was too late to ask, but I just said,

00:21:16 ◼   ► do you consider Apple one of the leading camera companies

00:21:21 ◼   ► in the world, and his answer was the leading camera company

00:21:24 ◼   ► in the world.

00:21:25 ◼   ► I mean, it's totally how he sees the importance

00:21:28 ◼   ► of the camera on the phone.

00:21:31 ◼   ► And I really, there's no other explanation I can think of

00:21:33 ◼   ► for why the mix of plus to non-plus would grow up this year.

00:21:38 ◼   ► 'Cause one of the big complaints about the iPhone 7

00:21:40 ◼   ► is that it quote-unquote looks just like the iPhone 6

00:21:43 ◼   ► and success that it's otherwise,

00:21:44 ◼   ► I just, it just seems like obvious.

00:21:49 ◼   ► - Yeah, and it's a great lever to get people

00:21:55 ◼   ► to buy that bigger phone even though they don't want

00:21:58 ◼   ► the bigger screen, you know, because people are often

00:22:00 ◼   ► just shocked by how large it is physically

00:22:03 ◼   ► when they hold it.

00:22:04 ◼   ► You know, if I hand somebody, I have a seven now,

00:22:06 ◼   ► but like I often use a seven plus,

00:22:09 ◼   ► especially when I'm traveling,

00:22:10 ◼   ► and so if I hand it to somebody, they're,

00:22:11 ◼   ► oh man, this is big.

00:22:12 ◼   ► if they've never used one or held one.

00:22:14 ◼   ► But it's a testament to how driven by camera people are

00:22:20 ◼   ► when they'll put up with that, so to speak.

00:22:23 ◼   ► And knowing how hard the camera team at Apple

00:22:28 ◼   ► had to push to make this thing even work,

00:22:32 ◼   ► the dual camera thing,

00:22:34 ◼   ► which is fairly, it's a really significant

00:22:36 ◼   ► technical achievement.

00:22:38 ◼   ► And if some other company had done this,

00:22:41 ◼   ► I mean Apple, they toot their own horn a lot, right?

00:22:44 ◼   ► But if some other company had done this,

00:22:46 ◼   ► they would have tooted it 10 times as much.

00:22:49 ◼   ► 'Cause it's actually a very, very, very, very difficult

00:22:51 ◼   ► technical problem that they achieved here.

00:22:53 ◼   ► And out of everything in the camera,

00:22:55 ◼   ► or excuse me, out of everything in the phone,

00:23:01 ◼   ► the camera is really the only thing

00:23:03 ◼   ► that's pushing the processor to its limits,

00:23:07 ◼   ► to its absolute peak limits right now.

00:23:10 ◼   ► You know, I mean, a game or whatever the case may be, they know what the limits are and

00:23:14 ◼   ► they work within those. But most games on average that people play aren't really pushing

00:23:19 ◼   ► that hard. Games is probably the number two category. But above that and far above anything

00:23:25 ◼   ► else that most people do on their phones or most of the capabilities of the phone, which

00:23:29 ◼   ► are pretty well known by now, the camera in that 7 Plus with its dual lens and twin capture

00:23:37 ◼   ► and blending of the pair of photos and all of the stuff that it does, it really is pushing

00:23:43 ◼   ► very, very hard that A-Series chip. So it's like a leading driver of the power, the chip

00:23:50 ◼   ► power that's in the phone because that chip does and has done everything it needs to do

00:23:56 ◼   ► for most people for a very long time, you know, for several generations. And so it's

00:24:01 ◼   ► driving forward the processing capability and power of the phone and I think it's,

00:24:06 ◼   ► you know, driving sales along with it.

00:24:08 ◼   ► - And it was clearly instrumental in the portrait mode,

00:24:13 ◼   ► or is, you know, like why, you know,

00:24:16 ◼   ► why did portrait mode and the dual mode thing

00:24:19 ◼   ► ship this year?

00:24:20 ◼   ► I mean, part of it was, I think,

00:24:22 ◼   ► that the camera engineering, just the camera itself,

00:24:24 ◼   ► it took a long time.

00:24:26 ◼   ► I think it's complicated, and just the algorithm

00:24:30 ◼   ► of how are you going to use these two lenses

00:24:33 ◼   ► for zooming and et cetera, et cetera.

00:24:36 ◼   ► But I think another part of it too

00:24:38 ◼   ► was that it was coincident with the A-series chip

00:24:41 ◼   ► getting fast enough that you can do this on the fly.

00:24:43 ◼   ► - From what I know about how long it took them

00:24:46 ◼   ► to build this, and obviously everybody knows

00:24:49 ◼   ► that it didn't ship with the phone, right?

00:24:51 ◼   ► It shipped several weeks later.

00:24:53 ◼   ► I don't think that was strategic.

00:24:55 ◼   ► I think it was necessary.

00:24:57 ◼   ► It was absolutely necessary for them

00:24:59 ◼   ► to actually make it work, like finish it,

00:25:02 ◼   ► and get it to work.

00:25:03 ◼   ► And that doesn't happen if you've been able to do it

00:25:05 ◼   ► for a processor generation.

00:25:07 ◼   ► - Right. - Like that was it.

00:25:08 ◼   ► - You literally, Matthew Banserino,

00:25:10 ◼   ► were the first person I knew who had access to it

00:25:12 ◼   ► 'cause you got a pre-release version of it

00:25:15 ◼   ► at least a couple of days ahead of the beta coming out.

00:25:18 ◼   ► And you had like a nice little exclusive on TechCrunch

00:25:23 ◼   ► with adorable pictures of your daughter.

00:25:25 ◼   ► But they were really, well, they chose well

00:25:29 ◼   ► because you've got a background in photography,

00:25:32 ◼   ► so you're not just sitting there

00:25:33 ◼   ► shooting pictures of your, I don't know,

00:25:36 ◼   ► your desk or whatever.

00:25:38 ◼   ► - Yeah. - But I think you could,

00:25:40 ◼   ► even when it first came out and they let us use the beta,

00:25:43 ◼   ► there were performance problems with it

00:25:46 ◼   ► that have since been ironed out,

00:25:47 ◼   ► and now it just, there is a sort of, it just works.

00:25:50 ◼   ► You put it in portrait mode, the preview is live,

00:25:52 ◼   ► the phone doesn't get hot, and it just works.

00:25:55 ◼   ► - Yeah, that stuff is being iterated on as we speak.

00:25:58 ◼   ► Like, you and I are talking right now, it's four o'clock.

00:26:01 ◼   ► I'm sure the camera team is still working on updates to that thing, right?

00:26:05 ◼   ► Because it's a living document, you know, in terms of the way that it performs.

00:26:11 ◼   ► The edge detection gets better every iteration, and the blur effect gets more organic and more natural.

00:26:17 ◼   ► You know, they're able to push that processor via optimization, because obviously the hardware hasn't changed, right?

00:26:22 ◼   ► So they are able to optimize the processes further, so they're able to do more and more complex calculations on that.

00:26:27 ◼   ► that. But it really is bleeding edge stuff. Like there, nobody else is pushing this hard.

00:26:32 ◼   ► And people were very quick, you know, when I published that preview and then eventually

00:26:36 ◼   ► when we did the review of the phone and stuff like that, people were very quick to say,

00:26:41 ◼   ► "Oh, you know, well this model or that model from some other brand has been doing this

00:26:44 ◼   ► for years, yada, yada." It's true that other brands have done this faux blur thing, but

00:26:53 ◼   ► not in this way and not to this level of sophistication.

00:26:56 ◼   ► And to be honest, even though some of the results

00:26:58 ◼   ► were kind of hinky up front,

00:27:00 ◼   ► you know it's gonna get better

00:27:01 ◼   ► because they're dedicated to making it better

00:27:03 ◼   ► and they know this is a primary driver of purchases.

00:27:07 ◼   ► Whereas a lot of these other phones,

00:27:09 ◼   ► it was a one-off gimmick to try and sell phones that quarter

00:27:13 ◼   ► and really is gonna get no significant updates

00:27:15 ◼   ► in the future, you know?

00:27:17 ◼   ► And it's a shame, but nobody else is really driving

00:27:19 ◼   ► like that.

00:27:20 ◼   ► works sort of backwards, right? From like, "Oh, you know, what do we think the market

00:27:25 ◼   ► wants this quarter? Let's try to produce that." And then, you know, they're--I'm not saying

00:27:30 ◼   ► that their products are not, you know, solid or, you know, decent or whatever if they don't

00:27:35 ◼   ► explode. But there is a drive there to get that kind of stuff right because they know

00:27:44 ◼   ► that this is the thing that people want. It's not what they say they want which is more

00:27:50 ◼   ► megapixels or sharper images or these crude terms that they use to describe it. It's actually

00:27:56 ◼   ► they want their pictures to look more like pictures. And that's a really nebulous thing

00:28:00 ◼   ► until you sort of figure out how to define that. I think they spend a lot of time trying

00:28:04 ◼   ► to define that for people.

00:28:06 ◼   ► Yeah, I also think it is the clearest path that I can think of, because I fail in certain

00:28:14 ◼   ► and other forms of imagination of how can the iPhone

00:28:18 ◼   ► continue to get better?

00:28:19 ◼   ► There are some little things like the True Tone color

00:28:26 ◼   ► that the iPad Pro has, that would be great

00:28:29 ◼   ► to eventually have it on the iPhone too.

00:28:32 ◼   ► But I can't see the display quality-wise

00:28:38 ◼   ► getting radically better, so much so that it would,

00:28:40 ◼   ► that's why you'd get a new phone.

00:28:42 ◼   ► everybody is, there's rumors that are rampant

00:28:44 ◼   ► that the industrial design is gonna change

00:28:46 ◼   ► and they're gonna get rid of the head and forehead

00:28:48 ◼   ► and just sort of go from a top to bottom,

00:28:50 ◼   ► left to right, edge to edge display.

00:28:53 ◼   ► And visually that would be very striking.

00:28:56 ◼   ► If it looks super cool, then I could see that driving sales.

00:29:00 ◼   ► But how many, after you do that, how does it keep going?

00:29:03 ◼   ► Whereas the camera can continue to get better

00:29:06 ◼   ► every 12 months, maybe not in a radical way

00:29:09 ◼   ► because you run up into limits of physics,

00:29:11 ◼   ► but, you know, and lens optics.

00:29:14 ◼   ► But in a tangible way, and that if you're only,

00:29:17 ◼   ► if you're on like a two or three year upgrade cycle,

00:29:19 ◼   ► you can get a radically better camera

00:29:21 ◼   ► every time you upgrade to a new phone.

00:29:22 ◼   ► That, to me, could continue to drive sales

00:29:26 ◼   ► about where we are right now for the iPhone

00:29:28 ◼   ► for years to come.

00:29:29 ◼   ► - Yeah, yeah.

00:29:33 ◼   ► There's not much else for them to chip away at.

00:29:36 ◼   ► And I think there will be new opportunities

00:29:40 ◼   ► in other categories that may even involve the camera,

00:29:43 ◼   ► AR, augmented reality, or VR, whatever the case.

00:29:47 ◼   ► But as far as the on-device components,

00:29:51 ◼   ► they're pretty well along towards diminishing returns.

00:29:56 ◼   ► So yeah, I agree, camera's a primary driver there.

00:30:01 ◼   ► - All right, let me take a break here

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00:30:14 ◼   ► Well, it was launched by a bunch of,

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00:30:21 ◼   ► And they make fabrics, performance fabrics,

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00:32:44 ◼   ► What next on the results front?

00:32:47 ◼   ► iPad, maybe.

00:32:49 ◼   ► iPad sales were 16 million last year the same quarter

00:32:53 ◼   ► and down to 13 million this quarter.

00:32:55 ◼   ► I don't know what to make of that.

00:32:59 ◼   ► - I don't know.

00:33:01 ◼   ► I mean, I think that,

00:33:02 ◼   ► I think we're still trying to find the replacement cycle,

00:33:10 ◼   ► and the bottom of it, you know, the, what do you call it?

00:33:16 ◼   ► The bottom of the pendulum arc.

00:33:18 ◼   ► - Yeah.

00:33:19 ◼   ► - But where it starts to swing back up

00:33:20 ◼   ► that people repurchase or stabilizes anyway.

00:33:23 ◼   ► Yeah, I don't know.

00:33:26 ◼   ► I mean, I think that there's two schools of thought on this.

00:33:28 ◼   ► I think you could argue that iPads are built really well

00:33:32 ◼   ► and they handle single tasks.

00:33:35 ◼   ► And it's sort of like you got a,

00:33:37 ◼   ► Apple sold a framing hammer to someone to hang pictures.

00:33:42 ◼   ► Right?

00:33:47 ◼   ► So like, you go to the hardware store,

00:33:49 ◼   ► There's five kinds of hammer there.

00:33:51 ◼   ► There's a picture hanging hammer,

00:33:54 ◼   ► which comes in a little plastic bubble pack,

00:33:59 ◼   ► and it's got a few finish nails and the hammer.

00:34:02 ◼   ► And it's like if you hammer anything bigger

00:34:04 ◼   ► than a teeny-tiny nail into plaster or whatever,

00:34:08 ◼   ► it just, the head falls off, right?

00:34:10 ◼   ► And you go all the way up the scale

00:34:12 ◼   ► through all the different hammers to a framing hammer.

00:34:13 ◼   ► And a framing hammer is a hammer that slams in

00:34:17 ◼   ► 10-pinning nails to 2x4s or 2x6s on a construction lot, right? The framing hammer is reinforced.

00:34:24 ◼   ► It's got like a long tang that's really thoroughly embedded in the head. And when you swing that

00:34:30 ◼   ► thing, bang, it's got a waffle head so you know the nail got nice and trunk down and

00:34:36 ◼   ► you can see that you got your imprint on that board so you know the nail's driven all the

00:34:39 ◼   ► way home. And you could just wail away on that for 10 years and that hammer will last

00:34:43 ◼   ► right? So Apple sold people framing hammers and they're, they're hammering in picture

00:34:50 ◼   ► frames. So you've got, you know, a ten-year-old or five-year-old or heck even a teenager or

00:34:59 ◼   ► an adult who uses it to browse the web and for a variety of different apps that don't

00:35:04 ◼   ► really push the capabilities of the iPad in any significant way. And they're like, "This

00:35:08 ◼   ► this is fine, why can't I just keep using this?

00:35:11 ◼   ► Because that framing hammer is nowhere near its limits.

00:35:15 ◼   ► And so I think that there's, that's one school of thought

00:35:18 ◼   ► that the iPad is significantly overbuilt

00:35:21 ◼   ► for the tasks that most people use it for.

00:35:24 ◼   ► And then the other school, I think, the other side of it,

00:35:27 ◼   ► is Apple has not done as good of a job as it could

00:35:32 ◼   ► explaining to people how much they can do

00:35:34 ◼   ► with that framing hammer.

00:35:35 ◼   ► Like they haven't sold it as a framing hammer.

00:35:37 ◼   ► And so I think that there's definitely some interesting

00:35:40 ◼   ► debates to be had there.

00:35:41 ◼   ► I don't even know where I fall on that scale yet.

00:35:43 ◼   ► I'm of two minds about it,

00:35:45 ◼   ► but I think those are the kind of arguments

00:35:47 ◼   ► that people are having about where the iPad is currently.

00:35:50 ◼   ► And then on top of that, you have this,

00:35:52 ◼   ► hey, we don't know how long it's gonna be

00:35:56 ◼   ► before people need to or want to replace an iPad

00:35:58 ◼   ► that they don't break.

00:35:59 ◼   ► Ever since the iPad 2 or 3 or whatever,

00:36:03 ◼   ► iPad AR I guess you'd say, it's been pretty capable.

00:36:07 ◼   ► - Yeah. - So why replace it?

00:36:10 ◼   ► - Yeah, I think it starts with the iPad Air.

00:36:13 ◼   ► I feel like up until then, it was still improving rapidly.

00:36:18 ◼   ► I mean, the first one is the first one.

00:36:19 ◼   ► I mean, you know, it was, you know, wow,

00:36:22 ◼   ► it's a tablet that people might actually buy,

00:36:24 ◼   ► but it was super thick, it didn't have retina.

00:36:26 ◼   ► And then it got thinner, and then it got retina,

00:36:29 ◼   ► but the iPad 3 that had retina actually got thicker

00:36:32 ◼   ► than the iPad 2 that was before it,

00:36:34 ◼   ► and it was replaced by Apple six months after it came out,

00:36:37 ◼   ► which is sort of ridiculous in hindsight.

00:36:40 ◼   ► It just shows how far they were pushing themselves

00:36:42 ◼   ► to get that Retina iPad 3 out.

00:36:45 ◼   ► And then I really feel like it found itself

00:36:49 ◼   ► with the iPad Air, where they shrank the sides on the sides.

00:36:53 ◼   ► And the A series chips had gotten,

00:36:57 ◼   ► I'm sorry about that, that launched Siri again on my phone

00:37:01 ◼   ► by saying A series. (laughing)

00:37:05 ◼   ► - I'm sorry, I apologize to anybody out there who's--

00:37:07 ◼   ► - Hey, Siri.

00:37:09 ◼   ► - Hey, Dingus was activated.

00:37:11 ◼   ► But, and I just feel, like my working hypothesis

00:37:17 ◼   ► on the weird trajectory of iPad sales,

00:37:20 ◼   ► weird meaning it, you know, at one point

00:37:22 ◼   ► was like 20 million a quarter, and it was faster,

00:37:26 ◼   ► it was never above the iPhone,

00:37:28 ◼   ► but it was above the iPhone at that date since launch.

00:37:33 ◼   ► like the first iPad outsold the first iPhone,

00:37:36 ◼   ► the second iPad, iPad 2, outsold the iPhone 3G.

00:37:40 ◼   ► And then it came down to earth.

00:37:43 ◼   ► And my working theory on this is simply

00:37:46 ◼   ► pretty much what you said,

00:37:47 ◼   ► that there was this great unfilled need.

00:37:50 ◼   ► Steve Jobs was right, that there was this middle territory

00:37:53 ◼   ► for something like an iPad in people's lives,

00:37:57 ◼   ► and there was nothing like it, right?

00:37:58 ◼   ► The phones were too small,

00:38:01 ◼   ► And laptops are, you know, they are great for certain things, but they're impersonal

00:38:08 ◼   ► enough and the form factor is such that it, you know, it creates this void that the iPad

00:38:15 ◼   ► actually does fill.

00:38:16 ◼   ► But then once people got one, especially of the Air Vintage or later, that's it.

00:38:21 ◼   ► They don't need another one until they, you know, break the other one.

00:38:24 ◼   ► - Mm-hmm.

00:38:25 ◼   ► Yeah, I mean, if you look at it from the terms of like, hey, Steve introduces the iPad and

00:38:30 ◼   ► and says, "We think people are gonna love this,

00:38:32 ◼   ► "people need this."

00:38:33 ◼   ► And that was, if you ascribe to the histories of it,

00:38:38 ◼   ► the iPad was the goal, and the iPhone was an ancillary thing

00:38:42 ◼   ► that they hit on.

00:38:44 ◼   ► But if you go back to that, and you say,

00:38:48 ◼   ► you have them walk on stage and say,

00:38:50 ◼   ► "We think that this is going to be, you know,

00:38:53 ◼   ► "in 10 years or whatever," what is it now, 2010,

00:38:57 ◼   ► so seven years.

00:38:59 ◼   ► in seven years this is going to be a total of $300 million business for Apple which is

00:39:05 ◼   ► about what iPads are, maybe a little more now, right? People would have been like overjoyed,

00:39:10 ◼   ► right? $300 million, you know, there's 300 million units, excuse me, $300 million, significantly

00:39:17 ◼   ► more dollars. But you know, you look at the amount total that you sold and these billions

00:39:23 ◼   ► of dollars of, you know, business that the iPad created, you would go, "Hey, that's an

00:39:27 ◼   ► an entire company, more than an entire company's worth of value that you're going to create

00:39:32 ◼   ► for Apple and shareholders and whatever else. That is more than great. And it is only because

00:39:38 ◼   ► the iPhone has been so, you know, outsized popular and now we know continues to grow

00:39:47 ◼   ► that the iPad looks paltry in comparison. Like you're judging it--

00:39:49 ◼   ► And because it had those go-go early years.

00:39:51 ◼   ► Yeah, yeah. Exactly. Exactly.

00:39:52 ◼   ► Where it was--

00:39:53 ◼   ► - Exactly, a real ramp up, fastest selling computer,

00:39:57 ◼   ► or fastest selling consumer electronics device.

00:40:00 ◼   ► I think maybe they connect beat it for a time

00:40:02 ◼   ► and then it, I don't know, don't quote me.

00:40:04 ◼   ► But one of the fastest anyway,

00:40:06 ◼   ► selling consumer electronics devices of all time.

00:40:09 ◼   ► And it just, yeah, you look at those boom years

00:40:12 ◼   ► and you go, oh man, now it's going down or whatever.

00:40:16 ◼   ► But iPads, they still sold 13 million of those

00:40:21 ◼   ► in the last quarter, which is crazy.

00:40:22 ◼   ► - And if you had-- - It's still

00:40:23 ◼   ► an enormous business.

00:40:24 ◼   ► - And it is Apple's answer

00:40:28 ◼   ► to the sub-thousand dollar computer market, right?

00:40:32 ◼   ► Like, let's just admit that the phone is a phone,

00:40:34 ◼   ► and even Apple, you know, smartphone is the most important

00:40:38 ◼   ► device in the computer industry it's ever come up with.

00:40:41 ◼   ► And even Apple, I think even as much as Apple knew

00:40:44 ◼   ► with the 10 year ago introduction of the iPhone

00:40:46 ◼   ► that they had something special on their hands,

00:40:48 ◼   ► I think that even Apple itself was surprised at

00:40:51 ◼   ► just how useful a smartphone could be

00:40:53 ◼   ► and how much we would depend on it as our primary device.

00:40:57 ◼   ► If you just think of the iPad,

00:41:00 ◼   ► if they called it the MacPad instead of iPad

00:41:03 ◼   ► and you discounted it with Mac sales as PC,

00:41:07 ◼   ► I don't think that's a ridiculous comparison to make,

00:41:10 ◼   ► that there are people who are going to go drop $500

00:41:14 ◼   ► on a portable computer.

00:41:15 ◼   ► Well, they're not gonna buy a MacBook

00:41:17 ◼   ► because there is no system that's a $500 MacBook,

00:41:19 ◼   ► but they might get an iPad Pro or an iPad Air or whatever.

00:41:24 ◼   ► If you add up those 13 million iPad sales

00:41:31 ◼   ► to the Mac's five million sales,

00:41:33 ◼   ► that's 18 million personal computers that Apple sold

00:41:36 ◼   ► in the whatever price range from iPad

00:41:39 ◼   ► to most expensive Mac, it's pretty impressive.

00:41:44 ◼   ► But I do think that it's sort of gonna,

00:41:47 ◼   ► think it's already settled into sort of a Mac-like static number of how many million

00:41:52 ◼   ► they can sell a quarter.

00:41:53 ◼   ► Steve: You know, so the analogy, the cars and trucks analogy, where a car's a, you know,

00:42:02 ◼   ► lightweight computer and a truck is a desktop or whatever. I mean, people often view the

00:42:09 ◼   ► iPad as the car and, you know, that's--and then set the iPhone aside. But I think it's

00:42:14 ◼   ► It's interesting to rejigger that a little bit

00:42:16 ◼   ► and view the iPhone as the car.

00:42:18 ◼   ► The iPhone's your daily driver.

00:42:22 ◼   ► You name me a day, you don't touch your iPhone.

00:42:25 ◼   ► It's possible.

00:42:26 ◼   ► If you lost it, you broke it, you don't touch it.

00:42:29 ◼   ► Other than that, you touch it every day.

00:42:31 ◼   ► So that's your car.

00:42:32 ◼   ► The desktop stays the truck.

00:42:34 ◼   ► The question then is, is the iPad your utility vehicle?

00:42:40 ◼   ► your utility vehicle or is it your sports car? In other words, do you like take it out

00:42:48 ◼   ► on the weekends to get work done or do you take it out on the weekends for fun? And I

00:42:52 ◼   ► think that there's whatever the case, whatever side of that you come down on, I think there's

00:42:56 ◼   ► definitely a case to be made for the iPad as like a purpose-driven device that, I mean,

00:43:02 ◼   ► you know, there are whole companies built up around like Revel Systems and other things

00:43:05 ◼   ► that are built up around using the iPads to serve functions.

00:43:10 ◼   ► And a large portion of its business

00:43:14 ◼   ► is driven by institutional sales, right?

00:43:17 ◼   ► Like schools and other things that use the iPads

00:43:20 ◼   ► in very specific ways.

00:43:22 ◼   ► And I think that there's the netbook arena or whatever,

00:43:27 ◼   ► when you remember the netbook era in schools

00:43:29 ◼   ► when everybody was like,

00:43:29 ◼   ► "Oh, we'll just buy netbooks for the kids."

00:43:31 ◼   ► And those things were just so bad, like so bad.

00:43:35 ◼   ► - Garbage. - Yeah, garbage.

00:43:38 ◼   ► - Garbage.

00:43:39 ◼   ► It was very funny to me because,

00:43:43 ◼   ► I mean, my son is now in seventh grade,

00:43:45 ◼   ► but as a 13-year-old, he's sort of,

00:43:47 ◼   ► like an interesting age technology-wise

00:43:51 ◼   ► because when he first started going to school,

00:43:55 ◼   ► it was, it wasn't quite 10 years ago,

00:43:58 ◼   ► but 2008, nine, whatever,

00:44:02 ◼   ► his school had a lot of,

00:44:04 ◼   ► I don't know if they were called netbooks,

00:44:05 ◼   ► but effectively they were.

00:44:07 ◼   ► That's what a lot of the devices they had.

00:44:08 ◼   ► And all the kids knew they were junk.

00:44:11 ◼   ► Like, 'cause it's so funny to me

00:44:13 ◼   ► because I remember when I was a kid,

00:44:15 ◼   ► getting access to any computer in school was,

00:44:18 ◼   ► it was like, all of a sudden I'm pumped,

00:44:22 ◼   ► just pumped full of dopamine and I'm on, yes.

00:44:25 ◼   ► And yes, there were ones that were better than others

00:44:27 ◼   ► and newer than others and there were even some of the,

00:44:31 ◼   ► some of the classes, I mean it was so ad hoc

00:44:33 ◼   ► at the elementary school I went to,

00:44:35 ◼   ► There were, some teachers had like a TI-99-4A

00:44:38 ◼   ► or whatever it was called, which was a total piece of junk.

00:44:40 ◼   ► I mean, it ran off a literal cassette tape drive,

00:44:43 ◼   ► but I loved it.

00:44:44 ◼   ► It was just so funny to me to see first graders

00:44:47 ◼   ► who thought that, didn't even wanna use the netbooks

00:44:49 ◼   ► because they were such a piece of junk.

00:44:51 ◼   ► - Right, and they can, it's like they can tell.

00:44:56 ◼   ► They can tell, everybody can tell.

00:44:58 ◼   ► And if you look at the iPad that way,

00:45:01 ◼   ► and you look at it like, hey,

00:45:03 ◼   ► no matter what your, I mean, you know,

00:45:06 ◼   ► there are some people that can't afford any computer at all

00:45:08 ◼   ► and that's, you know, to be, that's a different problem

00:45:13 ◼   ► or different discussion to be had, right?

00:45:15 ◼   ► But if you can afford a computer,

00:45:18 ◼   ► almost nearly the first computer you could afford

00:45:20 ◼   ► is either a subsidized iPhone or an unsubsidized iPad, right?

00:45:24 ◼   ► And I think that if you, you could look at like Chromebooks

00:45:28 ◼   ► and a lot of those other things as sort of

00:45:30 ◼   ► those companies' efforts to do that,

00:45:33 ◼   ► lower the barrier to get somebody to using their computer/using the web in Google's case

00:45:39 ◼   ► using their services and using their connected, you know, their connected services that carry

00:45:44 ◼   ► advertising and whatever the case may be. In Apple's case, it's the same thing. It's

00:45:49 ◼   ► like we want people to be into the Apple ecosystem so we can teach them about how good Apple

00:45:54 ◼   ► could be for them and what, you know, what an Apple computer feels like versus another

00:45:58 ◼   ► computer and I think the iPad is a good ambassador that way. And so if it always exists, if it

00:46:04 ◼   ► levels out at some point, because we haven't seen any leveling out, I think that's the

00:46:09 ◼   ► big question marks that everybody is seeing right now. Because once the true replacement

00:46:14 ◼   ► cycle starts to kick in and/or Apple finds a way to revitalize it in some significant

00:46:19 ◼   ► way where we get a new spike that resets the bar and then it slopes downwards from there

00:46:25 ◼   ► as everybody adopts the new thing. Whatever the case may be, I think there will be a point

00:46:30 ◼   ► where it eventually levels out and we see what kind of business the iPad business actually

00:46:35 ◼   ► is and will be long term. And I think that business will always be characterized by its

00:46:41 ◼   ► ability to give people expanded computing capabilities at far less price than in a MacBook.

00:46:49 ◼   ► And that's what it will always be for Apple. And Apple could preach about what it could

00:46:54 ◼   ► be for artists and what it could be for creatives and all this other stuff and that's great.

00:46:59 ◼   ► Now hopefully they continue to serve those people by pushing the capabilities of the

00:47:02 ◼   ► device, but the vast majority of sales in the category are not that. There's not 13

00:47:08 ◼   ► million artists buying it for pencils. That's not the way it works.

00:47:14 ◼   ► Dave Asprey The number I pointed out, well one of the

00:47:16 ◼   ► numbers I pointed out was that just looking at revenue, last year iPad was above Mac and

00:47:24 ◼   ► services by like a little bit for Mac and about a billion dollars in revenue for the

00:47:29 ◼   ► same quarter last year. And as of this year, the numbers announced today, the Mac did $7.2

00:47:38 ◼   ► billion in revenue and iPad was down to $5.5 billion and services were up from $6 billion

00:47:44 ◼   ► to $7.2 billion. Again, I'm not a doom and gloom on iPad, but I think it just goes to

00:47:51 ◼   ► show how the mix of the price points that are selling at iPad are low. I think that

00:47:58 ◼   ► the, you know, and I think iPad Pro is a successful product, but I think it's going to be most

00:48:03 ◼   ► successful in years to come as it trickles down, you know, the original iPad Pros trickle

00:48:08 ◼   ► down to the lower price points. And I think it's clear since the Macs, like unit sales

00:48:14 ◼   ► are just about dead even, but the revenue was up quite a bit that the MacBook Pros,

00:48:20 ◼   ► new ones sold pretty well for the first quarter. And I don't even think that that, they weren't

00:48:24 ◼   ► even out for the whole quarter.

00:48:25 ◼   ► - Right. Yeah, they weren't. And when you look at that trickle-down effect, I mean,

00:48:31 ◼   ► you look at the iPad Pro, especially the larger one, and how much capability, I mean, easily

00:48:38 ◼   ► at, on par, utility-wise, at least in the specific utilities, with Cintiq, you know,

00:48:49 ◼   ► from Wacom that were several thousand dollars more

00:48:54 ◼   ► and frankly worse.

00:48:56 ◼   ► You know, the pencil tracking was not nearly

00:48:59 ◼   ► what it is on the iPad and the screen does not have

00:49:02 ◼   ► the color rendition and accuracy of the iPad Pro.

00:49:05 ◼   ► And you look at all that and you look at,

00:49:06 ◼   ► as that trickles down, you're gonna see those

00:49:09 ◼   ► pro devices being, giving people access,

00:49:15 ◼   ► artists and other creatives access to those capabilities

00:49:18 ◼   ► in ways that just were not even heard of.

00:49:21 ◼   ► And I think Apple doesn't get credit for that stuff

00:49:23 ◼   ► because people wanna see,

00:49:26 ◼   ► in the business and tech writing world,

00:49:28 ◼   ► people wanna see those results in the numbers.

00:49:31 ◼   ► And it's like, oh, everybody must buy that iPad Pro

00:49:35 ◼   ► and really drive up the sales and price

00:49:37 ◼   ► and stuff every quarter.

00:49:38 ◼   ► Whereas if you look at it in the arc of the game

00:49:41 ◼   ► where it's like, hey, we're shipping this now in a year,

00:49:46 ◼   ► it's gonna be really affordable

00:49:47 ◼   ► and we're gonna sell a lot more of them,

00:49:49 ◼   ► or a lot more of devices that have their capability,

00:49:52 ◼   ► whatever they're gonna call them.

00:49:54 ◼   ► And that arc, I think, is a very interesting one,

00:49:57 ◼   ► and it's hard to message, right?

00:49:59 ◼   ► 'Cause people don't wanna hear,

00:50:02 ◼   ► we're putting this thing out

00:50:03 ◼   ► that not a lot of people are gonna buy,

00:50:05 ◼   ► but more people will buy later when it's affordable.

00:50:07 ◼   ► They wanna hear, oh, we're putting this thing out

00:50:09 ◼   ► that people must buy now.

00:50:10 ◼   ► - Yeah, yeah. - And, you know.

00:50:12 ◼   ► - Right. - That's it.

00:50:13 ◼   ► - Like anything short of an iPad

00:50:15 ◼   ► that makes everybody just throw their old iPad in the garbage

00:50:18 ◼   ► and go get in line to buy the new one is somehow a failure.

00:50:22 ◼   ► But it doesn't really work that way.

00:50:24 ◼   ► The only other thing I have from the results

00:50:27 ◼   ► and from the notes of the conference call that I read

00:50:30 ◼   ► was that Tim Cook pointed out that Apple Pay users

00:50:33 ◼   ► are up three X year over year.

00:50:36 ◼   ► So that's a really, that's a very good year for Apple Pay,

00:50:41 ◼   ► especially since it's what, two years old now?

00:50:43 ◼   ► Two and a half years old?

00:50:44 ◼   ► And again, that's the other thing I had in my notes that is sort of like, hey, let's

00:50:50 ◼   ► all remember that getting people to do something to like 2013 years, hey, you're going to

00:50:58 ◼   ► pay for stuff by putting your fingerprint on a phone at the register on your cell phone.

00:51:05 ◼   ► Sounds weird, right?

00:51:06 ◼   ► It's like different and it's like, I don't know.

00:51:08 ◼   ► I mean, I know enough about how it works.

00:51:11 ◼   ► 'cause I understand it, that it's,

00:51:12 ◼   ► I actually understand that it's actually more secure

00:51:15 ◼   ► than using a credit card, a lot more secure,

00:51:17 ◼   ► if you're doing a magnetic swipe.

00:51:20 ◼   ► But people always have the heebie-jeebies

00:51:25 ◼   ► about putting their credit card into their phone

00:51:26 ◼   ► or something like that.

00:51:27 ◼   ► I mean, there are an awful lot of people

00:51:29 ◼   ► who spent years not buying anything at all on the web

00:51:32 ◼   ► because they didn't feel like they could trust it

00:51:34 ◼   ► because it was new and different,

00:51:36 ◼   ► and that's just the way humans are hooked up,

00:51:38 ◼   ► for the most part, that new and different is scary,

00:51:41 ◼   ► and therefore you wait.

00:51:42 ◼   ► So 3X growth in Apple Pay, I guess,

00:51:46 ◼   ► I didn't see the details on where exactly that is,

00:51:48 ◼   ► like how much of that is in the US,

00:51:50 ◼   ► how much of it is worldwide expansion.

00:51:52 ◼   ► But I feel it's one of those stories that,

00:51:55 ◼   ► in terms of hey, Apple hasn't done a goddamn thing

00:51:57 ◼   ► under Tim Cook, that that crowd conveniently overlooks.

00:52:02 ◼   ► That it's a really solid Tim Cook, Apple era success story.

00:52:07 ◼   ► >> Yeah, I mean changing user behavior on something that has to do with their wallet,

00:52:13 ◼   ► you know, their bank account or whatever, that's insanely hard. It's insanely hard.

00:52:18 ◼   ► And so it is, it is encouraging to see things like that, that theoretically, you know, could

00:52:23 ◼   ► be big bets. I mean, you know, when people had the inkling that they were going to get

00:52:27 ◼   ► into payments, you know, people saw that as a, as a very big business for them. And I

00:52:32 ◼   ► think it's still, you know, it already is somewhat of a business, another services category,

00:52:36 ◼   ► and could be a much larger business in the future, especially if Apple's able to sell

00:52:42 ◼   ► Apple Pay through and keep up this kind of growth. But the hurdles you have to overcome

00:52:50 ◼   ► when you're switching over to something like Apple Pay are crazy. You come to the counter

00:52:56 ◼   ► and you're going to pay with your phone and you're not quite sure where to put it and

00:53:01 ◼   ► you're not how far away and what part of this credit card. So I put it where the credit

00:53:06 ◼   ► card goes? Do I put it over the keypad? Do I put it over some weird symbol that I'm not

00:53:09 ◼   ► familiar with? Do I put it on this clear plastic part? And people are embarrassed. They don't

00:53:14 ◼   ► want to do that. First of all, there are people behind them.

00:53:17 ◼   ► You don't like that. I hate it.

00:53:19 ◼   ► It's still so early days that usually, like when I go to a place that, like I notice that

00:53:24 ◼   ► they've upgraded their point of sale systems and I either see the Apple Pay logo or I see

00:53:29 ◼   ► that little Wi-Fi looking logo that means it usually works. Apple Pay usually works

00:53:34 ◼   ► even if they're not officially Apple Pay yet,

00:53:37 ◼   ► that it just has contactless NFC payments.

00:53:42 ◼   ► The clerk usually has no idea.

00:53:43 ◼   ► They'll be like, "How are you gonna pay?"

00:53:45 ◼   ► And I'll say, "I'm gonna try Apple Pay."

00:53:46 ◼   ► And they'll say, "What's that?"

00:53:48 ◼   ► I mean, I've had that happen,

00:53:49 ◼   ► and I'm not afraid to do it because I know,

00:53:52 ◼   ► A, I'm not embarrassed even if it doesn't work,

00:53:56 ◼   ► and B, I'm not embarrassed that I might know more

00:54:00 ◼   ► about how this works than the clerk,

00:54:01 ◼   ► but somebody has to go first,

00:54:02 ◼   ► and people are resistant to stuff like that.

00:54:05 ◼   ► Here's a funny thing, this is true.

00:54:07 ◼   ► I forget if I've mentioned this on the show before or not,

00:54:09 ◼   ► but one of the places I go that just added

00:54:12 ◼   ► a new point of sale system that supports Apple Pay

00:54:15 ◼   ► are the state-run liquor stores here in Pennsylvania.

00:54:20 ◼   ► And theirs very consistently

00:54:24 ◼   ► doesn't work on the first try.

00:54:30 ◼   ► Every single time, I put my phone there,

00:54:32 ◼   ► I have my thumb on the sensor and it says,

00:54:35 ◼   ► "Card not valid," or something's not valid,

00:54:38 ◼   ► "Use card instead."

00:54:40 ◼   ► But if I just sit there and lift my thumb

00:54:42 ◼   ► and press it again, it goes ding,

00:54:44 ◼   ► and then I get the payment.

00:54:46 ◼   ► But how many people would even think to try that?

00:54:48 ◼   ► Like, did, and every time, every single time I do it--

00:54:51 ◼   ► - You. - Right.

00:54:52 ◼   ► I just looked at the error message and I thought,

00:54:56 ◼   ► well, that error message makes no sense,

00:54:57 ◼   ► so I'm just going to try again.

00:54:59 ◼   ► And I didn't ask the clerk for help or anything,

00:55:01 ◼   ► I just sat there, I just moved the phone away,

00:55:03 ◼   ► moved it back, and now every time I do it,

00:55:05 ◼   ► it gets, it's the same thing.

00:55:06 ◼   ► Anything else on earnings?

00:55:09 ◼   ► - Yeah, that kind of finicky-ness doesn't translate well.

00:55:12 ◼   ► - Yeah.

00:55:13 ◼   ► Anything else on earnings before we move on?

00:55:15 ◼   ► - Nothing ahead.

00:55:16 ◼   ► - All right.

00:55:17 ◼   ► Let me take a break then,

00:55:19 ◼   ► and thank our next sponsor, it's our good friends,

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00:56:34 ◼   ► Audio content is so great.

00:56:36 ◼   ► If you're listening to me to sell you on Audible right now, you obviously listen to audio content.

00:56:43 ◼   ► You obviously listen to really long podcasts.

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00:56:54 ◼   ► will find it. So, my thanks to Audible for sponsoring the show. Remember that URL,

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00:57:03 ◼   ► Here's some news, and it's interesting. It's a follow-up from last week's show. I had Ben

00:57:11 ◼   ► Thompson on, and I mentioned an anecdote from a reader of the show, and I was a little nervous

00:57:15 ◼   ► bringing it up because it was like one reader who wrote me this email. But he convinced me—it

00:57:24 ◼   ► It really seemed like he knew what he was talking about.

00:57:27 ◼   ► He wasn't just spitting in the wind.

00:57:29 ◼   ► But he bought the new LG Ultrafine 5K display, the one

00:57:32 ◼   ► that Apple co-developed.

00:57:35 ◼   ► And it's the only retina standalone display

00:57:38 ◼   ► you can get from Apple right now, these LG models.

00:57:42 ◼   ► And he was having all sorts of problems with it.

00:57:45 ◼   ► And for some reason, it occurred to him to try moving it.

00:57:48 ◼   ► And he did.

00:57:49 ◼   ► And it turns out that moving it away from his Wi-Fi router

00:57:52 ◼   ► solved the problems.

00:57:53 ◼   ► And I mentioned this on the show with Ben Thompson.

00:57:55 ◼   ► Well, it seems like this is an actual thing.

00:57:59 ◼   ► Zach Hall wrote a story at 9to5Mac, first-hand story,

00:58:04 ◼   ► where the exact same thing happened with him,

00:58:07 ◼   ► where he, and the problem was so bad,

00:58:10 ◼   ► it was like actually crashing his MacBook.

00:58:12 ◼   ► He had his MacBook hooked up to the 5K display,

00:58:15 ◼   ► and it was like freezing his MacBook.

00:58:19 ◼   ► He Googled a little bit, saw some,

00:58:22 ◼   ► speculating about this, hey, it's near a WiFi router.

00:58:26 ◼   ► His was near his WiFi router, so he moved it to a different,

00:58:29 ◼   ► moved it away from his desk, and the problems all went away,

00:58:33 ◼   ► and then he contacted LG, and LG said, yeah,

00:58:35 ◼   ► just don't use it near a WiFi router.

00:58:37 ◼   ► This is crazy.

00:58:40 ◼   ► (laughing)

00:58:42 ◼   ► - Well, I mean, why would a computer

00:58:44 ◼   ► ever be near a WiFi router?

00:58:45 ◼   ► - Right, right, it's, I can't help but think,

00:58:49 ◼   ► especially in a home office, it's gotta be a frequent,

00:58:52 ◼   ► a common scenario, you know, and anybody, you know, like--

00:58:56 ◼   ► - Yeah, probably.

00:58:57 ◼   ► - Anybody who's, like, lives in, like,

00:58:59 ◼   ► a studio apartment or something like that,

00:59:01 ◼   ► I mean, you may not even be able to move it that far away.

00:59:03 ◼   ► You know, it's kinda crazy.

00:59:05 ◼   ► And it just-- - Yeah, it's insane.

00:59:09 ◼   ► Yeah.

00:59:11 ◼   ► - I mean, the gist of-- - I guess we know how,

00:59:13 ◼   ► exactly how closely co-developed it was now.

00:59:16 ◼   ► - Yeah. (laughs)

00:59:18 ◼   ► The gist of this display, I do not have one.

00:59:21 ◼   ► I have a iMac here, so I'm not, a 5K iMac,

00:59:25 ◼   ► so I'm not in the market for a standalone display.

00:59:27 ◼   ► But I saw, I've seen them in the Apple stores,

00:59:28 ◼   ► I saw them at the Apple event that you and I were at

00:59:31 ◼   ► a couple months ago.

00:59:32 ◼   ► And my impression, my firsthand impression

00:59:36 ◼   ► of just looking at it from a kick the tires perspective

00:59:39 ◼   ► was it's a gorgeous display in a really chintzy,

00:59:44 ◼   ► but at least plain looking case.

00:59:47 ◼   ► It doesn't, it's not an ugly, I don't think they're ugly,

00:59:50 ◼   ► but they're not really, it's not sexy.

00:59:52 ◼   ► Yeah, it's not sexy like an Apple product is.

00:59:55 ◼   ► So like you're like, wow, that is, I want that.

00:59:57 ◼   ► That is gorgeous even before you see it.

00:59:59 ◼   ► But the display quality is excellent.

01:00:01 ◼   ► And the convenience of just being able to plug in

01:00:05 ◼   ► USB-C, Thunderbolt, and just have it work

01:00:07 ◼   ► seems really great.

01:00:08 ◼   ► But like you said, it seems pretty clear

01:00:11 ◼   ► that the collaboration with Apple was not on the enclosure.

01:00:16 ◼   ► So the chintzy-- - No, no, yeah, exactly.

01:00:20 ◼   ► none of the shielding. (laughs)

01:00:21 ◼   ► - The chintzy feeling and looking enclosure

01:00:24 ◼   ► is also chintzelly shielded.

01:00:26 ◼   ► I'm not an expert on shielding, but it seems to me

01:00:31 ◼   ► like this is just emblematic of why

01:00:34 ◼   ► there's a practical reason beyond just wanting

01:00:37 ◼   ► to spend more money that a lot of us wish Apple

01:00:41 ◼   ► were making its own Apple-branded 5K displays.

01:00:47 ◼   ► - Yeah, I mean, the answers that I got with this stuff

01:00:51 ◼   ► when I poked around, you know, like why the heck not,

01:00:53 ◼   ► you know, is it's pretty much as hard as designing

01:00:58 ◼   ► an entire system, so why do it?

01:01:01 ◼   ► And it's, you know, or not why do it,

01:01:03 ◼   ► it's not that attitude that I got, like who cares,

01:01:06 ◼   ► it was more we have so many hours in the day

01:01:09 ◼   ► and this is like designing a new iMac,

01:01:11 ◼   ► so maybe we shouldn't do it this time, you know,

01:01:15 ◼   ► and maybe we should put our efforts elsewhere.

01:01:17 ◼   ► And I mean you could disagree or agree.

01:01:19 ◼   ► I'm not saying yea or nay to their POV,

01:01:22 ◼   ► but that's the input that I got.

01:01:25 ◼   ► And that's not through official channels or anything,

01:01:27 ◼   ► so this is not like a PR message.

01:01:29 ◼   ► It's just a matter of like, it's really hard to build that,

01:01:33 ◼   ► especially because of the throughput

01:01:36 ◼   ► that you have to have to connect it to external displays.

01:01:39 ◼   ► And if they wanted to do it the way

01:01:40 ◼   ► that they wanted to do it normally,

01:01:42 ◼   ► which probably would have worked close to a WiFi router,

01:01:44 ◼   ► it would have taken them a lot of time and money

01:01:47 ◼   ► and manpower to achieve.

01:01:49 ◼   ► I guess the money's not really the problem,

01:01:51 ◼   ► it's more the time and manpower.

01:01:53 ◼   ► Taking somebody off of Macs or off of another department

01:01:58 ◼   ► to work on that or hiring people in

01:02:00 ◼   ► and then training them up through Apple University

01:02:03 ◼   ► and blah, blah, blah to get to a point

01:02:05 ◼   ► where they are able to work on those hardware products.

01:02:08 ◼   ► They just felt they couldn't devote the time to it, I guess.

01:02:12 ◼   ► I don't know, it's a hard one.

01:02:16 ◼   ► Whether you want to fault them or not, I don't know.

01:02:21 ◼   ► And obviously some people do, but for this,

01:02:24 ◼   ► for which is that they have so much money,

01:02:27 ◼   ► how can they possibly be stretched thin on resources?

01:02:31 ◼   ► Now, whether that's an actual emblematic

01:02:34 ◼   ► of a problem in their mindset,

01:02:36 ◼   ► that they're still at an executive level,

01:02:38 ◼   ► think too much like the small company,

01:02:39 ◼   ► smaller company they used to be pre-iPhone,

01:02:42 ◼   ► or whether it's actually bad management, I don't know.

01:02:46 ◼   ► But it's obvious though that they are.

01:02:49 ◼   ► Whether that's reasonable and that's a sign

01:02:52 ◼   ► that for Apple to be Apple,

01:02:55 ◼   ► that maybe the pro argument would be for Apple to be Apple,

01:02:59 ◼   ► they have to continue to be like a small company

01:03:02 ◼   ► that focuses on a few things

01:03:04 ◼   ► because that's just how it works.

01:03:07 ◼   ► The con argument would be it's just ridiculous

01:03:10 ◼   ► they can't afford to put an engineering team together to do a display.

01:03:15 ◼   ► But it's the proof, you know, whether it should be this way or not, they are.

01:03:20 ◼   ► They're stretched thin.

01:03:21 ◼   ► And I think that the decision not to do this, it's exactly along those lines.

01:03:26 ◼   ► That if it's going to take us that much effort to do this, we put that effort somewhere else.

01:03:31 ◼   ► Right.

01:03:32 ◼   ► Yes.

01:03:33 ◼   ► And you could hammer all day on the argument that, well, they should be able to afford

01:03:38 ◼   ► the man hours or whatever the case. But yeah, that's the way it came down and that's why

01:03:43 ◼   ► these decisions were made the way they are. As far as I know, I don't know. Maybe I'm

01:03:46 ◼   ► wrong. But I think you reach a point where saying no becomes less about, "Oh, we're

01:03:55 ◼   ► not going to pursue this new fun thing." And sometimes it comes down to, "We're not

01:04:02 ◼   ► going to splinter ourselves in ways that make a lot of logical sense. Like it's much harder

01:04:11 ◼   ► to say no to the things that makes--make a ton of sense than it is to say no to the things

01:04:16 ◼   ► that have very obvious faults and flaws and whatever. You know, I mean, so many unknowns

01:04:22 ◼   ► in a project can lead you to say no. So many things that say, "Hey, you know, we're down

01:04:28 ◼   ► this pathway, we've spent a lot of money and whatever, those could be hard to say no to.

01:04:33 ◼   ► But the ones that make total sense like, "Why wouldn't Apple make an external display?"

01:04:37 ◼   ► Those are the ones that you're going to take the most heat over. Those are the ones that you're

01:04:42 ◼   ► going to hopefully have to really come to, have a come to Jesus moment on and say, "We're not making

01:04:49 ◼   ► them for these reasons that make a lot of sense to us and that we can't even message or, you know,

01:04:56 ◼   ► don't want a message externally for whatever reason.

01:05:00 ◼   ► If it is simply that they don't have enough people

01:05:04 ◼   ► to work on it, man, it's hard.

01:05:08 ◼   ► That's a hard thing to defend,

01:05:09 ◼   ► but if they don't have them, they don't have them, right?

01:05:12 ◼   ► What are you gonna do?

01:05:14 ◼   ► You can't just hire a whole new random team

01:05:16 ◼   ► full of random people to work on a high-profile

01:05:19 ◼   ► hardware release because you're gonna have the same problem

01:05:22 ◼   ► as the LG thing has.

01:05:23 ◼   ► It's gonna have some weird dumb issue.

01:05:25 ◼   ► I mean, as hard as Apple works on their stuff,

01:05:27 ◼   ► there's always some weird dumb issue

01:05:28 ◼   ► when they launch something, right?

01:05:29 ◼   ► Because this stuff is difficult, and it's very complex.

01:05:33 ◼   ► So if you're not gonna own that,

01:05:35 ◼   ► and own whatever problems you come,

01:05:37 ◼   ► you can't say, oh, we put our B team on this, right?

01:05:40 ◼   ► Or we put the noobs on it.

01:05:41 ◼   ► You just gotta say no.

01:05:42 ◼   ► - I wouldn't be surprised if Apple

01:05:46 ◼   ► doesn't do a standalone display, or to, you know, 4K and 5K.

01:05:51 ◼   ► I don't know.

01:05:54 ◼   ► I don't have any kind of like little birdie info

01:05:56 ◼   ► that yes, they're coming.

01:05:58 ◼   ► I have had little birdie info and other people have too

01:06:01 ◼   ► that there were Apple branded displays

01:06:03 ◼   ► in the works within Apple.

01:06:05 ◼   ► Whether they're still moving forward,

01:06:07 ◼   ► I have not heard anything, I don't know.

01:06:09 ◼   ► So I don't have, I can't even whisper a secret on the show

01:06:13 ◼   ► and say I've heard it.

01:06:14 ◼   ► But I know that there were and I wouldn't be surprised

01:06:19 ◼   ► if the story is, I mean, the one everybody seems to believe

01:06:23 ◼   ► right now is Apple is out of the standalone display game,

01:06:26 ◼   ► period, and we're never gonna have another one.

01:06:28 ◼   ► Possible, I would not be surprised if there never

01:06:31 ◼   ► is another standalone display.

01:06:32 ◼   ► Other than treating the iMac, buying an iMac

01:06:37 ◼   ► just to use as a standalone display with target display mode

01:06:40 ◼   ► which is kind of ridiculous, the idea that you'd buy

01:06:42 ◼   ► a computer you wouldn't use, but it does work.

01:06:47 ◼   ► - I just also beg the question, how expensive is the display

01:06:52 ◼   ► versus the other components in the device.

01:06:54 ◼   ► So if your 5K display had to be 60% as expensive

01:06:59 ◼   ► as a regular iMac, that's on the bubble.

01:07:02 ◼   ► If it's 70% as expensive, who the hell's gonna buy it?

01:07:05 ◼   ► So there's also that component cost angle

01:07:11 ◼   ► that you gotta think about.

01:07:12 ◼   ► - I wouldn't be surprised though if the story is simply,

01:07:15 ◼   ► and again, on this theme of Apple can only do so much

01:07:18 ◼   ► at a time and there's only so many resources for testing

01:07:21 ◼   ► and for even just stuff like sales

01:07:24 ◼   ► and training the entire retail staff

01:07:27 ◼   ► on product design and stuff like that.

01:07:29 ◼   ► I wouldn't be surprised if they're still in the works,

01:07:33 ◼   ► but it was so clear that it wasn't gonna be done

01:07:36 ◼   ► in time for October 2016,

01:07:39 ◼   ► when they needed to have something to sell

01:07:41 ◼   ► with the new MacBook Pros.

01:07:42 ◼   ► They needed some sort of retina display

01:07:47 ◼   ► that would work with USB-C and Thunderbolt 3.

01:07:51 ◼   ► They couldn't get that done in time.

01:07:55 ◼   ► LG could slap something together.

01:07:59 ◼   ► And so that's what they did.

01:08:00 ◼   ► And that maybe, but it won't,

01:08:03 ◼   ► I think maybe it won't come out till like a year,

01:08:05 ◼   ► like next year, like next October, October 2017,

01:08:09 ◼   ► a year later, here's the new Apple,

01:08:11 ◼   ► whatever they're gonna call it, 5K display.

01:08:14 ◼   ► - Right. - And it doesn't--

01:08:15 ◼   ► - It'll be hard to think that this would be

01:08:17 ◼   ► their ambassador forever.

01:08:18 ◼   ► - Right, it's really hard.

01:08:20 ◼   ► I know that,

01:08:21 ◼   ► it sounds funny, but I know John Siracusa

01:08:29 ◼   ► has made this point on ATP several times.

01:08:31 ◼   ► They're gonna make this brand new campus.

01:08:32 ◼   ► It's gonna be, it's all Johnny Ive approved hallways

01:08:36 ◼   ► and curved glass and lighting fixtures and desks.

01:08:41 ◼   ► They're designing their own tables and all of this.

01:08:44 ◼   ► And what are they gonna do?

01:08:45 ◼   ► with LG displays on the engineer's desk.

01:08:48 ◼   ► (laughing)

01:08:49 ◼   ► It just seems ridiculous.

01:08:51 ◼   ► I mean, for everybody that doesn't have an iMac.

01:08:53 ◼   ► - That's such a John Sirk, he's a thing.

01:08:54 ◼   ► - Right. - That's really funny.

01:08:55 ◼   ► I like it. - But it does.

01:08:57 ◼   ► So, other than Nellie Patel, Nellie is the one

01:09:00 ◼   ► who based on, like, is off the record briefing

01:09:03 ◼   ► at the event, said Apple said they're out of the game.

01:09:07 ◼   ► I was told a little bit more like what you heard,

01:09:09 ◼   ► which is what I asked.

01:09:12 ◼   ► I was like, hey, does this, I just,

01:09:14 ◼   ► I asked in a briefing, like, hey, is this LG display?

01:09:16 ◼   ► Does that mean you're not gonna make a standalone display?

01:09:18 ◼   ► And of course, I did not get an answer.

01:09:20 ◼   ► (laughs)

01:09:21 ◼   ► A masterful, completely prepared,

01:09:23 ◼   ► they were obviously rehearsed on the point.

01:09:26 ◼   ► Did not get a yes or no, but I got,

01:09:28 ◼   ► this is the display we have to show you,

01:09:30 ◼   ► you know, what we're selling now.

01:09:31 ◼   ► This is the display that will be in our stores,

01:09:34 ◼   ► that we'll have, you know, hooked up in a prominent space

01:09:38 ◼   ► in all of our retail stores, so make of that what you will.

01:09:40 ◼   ► And that making a standalone display today

01:09:43 ◼   ► with all this stuff is as complicated as making

01:09:45 ◼   ► a new iMac or something like that.

01:09:48 ◼   ► That to me doesn't say never, but it does say to me,

01:09:52 ◼   ► yes, you can buy the LG display now

01:09:55 ◼   ► if you need a new display, and we're not going to

01:09:58 ◼   ► come out with one in a couple of weeks

01:10:00 ◼   ► or a couple of months.

01:10:01 ◼   ► - I think it honestly, what it comes down to is

01:10:02 ◼   ► if it makes sense, then they will.

01:10:05 ◼   ► And it makes a lot of sense to me, that's all I know,

01:10:08 ◼   ► that they would do it one day, but that that day wasn't now,

01:10:13 ◼   ► and that they needed something to ship.

01:10:14 ◼   ► I think you're totally right on that.

01:10:15 ◼   ► - Yeah, it also seems to me,

01:10:16 ◼   ► like in terms of allocating engineering and testing

01:10:19 ◼   ► and all the other stuff for it,

01:10:20 ◼   ► it seems to me like the sort of thing

01:10:22 ◼   ► that they could get a lot of years out of,

01:10:23 ◼   ► because they have in the past

01:10:24 ◼   ► where they've come out with new,

01:10:26 ◼   ► when they called them cinema displays

01:10:27 ◼   ► or whatever the other product names were,

01:10:29 ◼   ► they sold them, they'd come out with a new one

01:10:32 ◼   ► and it would be great and maybe price competitive

01:10:34 ◼   ► with other companies based on the technology of the day.

01:10:36 ◼   ► And then Apple just keeps selling them at 9.99

01:10:39 ◼   ► as the years go on and monitors from Dell

01:10:42 ◼   ► and other companies improve or drop in price.

01:10:45 ◼   ► And Apple can keep selling it 'cause it's Apple

01:10:48 ◼   ► and people like to buy the Apple branded one

01:10:50 ◼   ► and they'll pay a premium for it

01:10:52 ◼   ► even if it's a couple of years old.

01:10:54 ◼   ► It just seems to me that they're at a place

01:10:56 ◼   ► with these displays where you don't need

01:11:00 ◼   ► more pixels per inch, they're super bright,

01:11:03 ◼   ► they've got amazing color, they've gotten

01:11:06 ◼   ► to the wide color gamut.

01:11:10 ◼   ► if Apple came out with it, I think I could see that they come out with one and sell it

01:11:14 ◼   ► unchanged for three, four, five years. I mean, three is probably, I mean, three for sure.

01:11:20 ◼   ► - Absolutely. I mean, the 5K is like, yeah, 5K is, it's getting close to paper resolution.

01:11:25 ◼   ► I mean, you know, or even above if you count color rendition. And so it's just, there's

01:11:29 ◼   ► not really a, there's not a lot of places to go from there. So if they make something,

01:11:36 ◼   ► they could squeeze many, many years out of it. And really what would change would be,

01:11:40 ◼   ► if there's another major change in input or output.

01:11:43 ◼   ► - Yeah, I think that-- - Or throughput of a connector

01:11:45 ◼   ► or whatever. - Yeah, I think that

01:11:46 ◼   ► the display itself is least likely to be the,

01:11:49 ◼   ► we need something to replace it,

01:11:52 ◼   ► it's more likely to be the connector.

01:11:54 ◼   ► - Yeah, it's like, oh, I can't believe this display

01:11:58 ◼   ► doesn't have USB 8, you know, that kind of thing.

01:12:01 ◼   ► (laughing)

01:12:03 ◼   ► - Let me take one final break here

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01:13:56 ◼   ► Here we go, deep breath.

01:14:00 ◼   ► Wish I had a stiff drink,

01:14:02 ◼   ► but instead I've just got fizzy water.

01:14:03 ◼   ► (laughing)

01:14:05 ◼   ► - I can't, we can't, I can't keep going,

01:14:08 ◼   ► I can't do this without mentioning Trump's immigration order

01:14:11 ◼   ► that came down last week and Silicon Valley's responses.

01:14:14 ◼   ► And even if you wanna play the,

01:14:16 ◼   ► let's not talk about politics,

01:14:18 ◼   ► it's way too essential to the racket that we cover.

01:14:23 ◼   ► It really, it hits home.

01:14:24 ◼   ► I mean, it's a huge deal and I don't,

01:14:30 ◼   ► I think it's hard to overstate how much of a reaction

01:14:35 ◼   ► it's already gotten from companies like Apple

01:14:37 ◼   ► and Google and et cetera.

01:14:40 ◼   ► I saw Google had a big rally.

01:14:44 ◼   ► - That's right, employees did.

01:14:47 ◼   ► I've gotten so much hate mail over this, Jon.

01:14:55 ◼   ► We cover politics and we cover the policies

01:15:00 ◼   ► that affect tech, and we always have,

01:15:02 ◼   ► we have for many years.

01:15:03 ◼   ► But we've been covering so much more of it lately

01:15:06 ◼   ► because so much more has been happening

01:15:08 ◼   ► that's related to our industry that we cover

01:15:12 ◼   ► and the companies that look to us for whatever reactions

01:15:17 ◼   ► or whatever context that they want to have.

01:15:24 ◼   ► And we've been writing about a significant amount

01:15:27 ◼   ► of these things as they relate to individual companies

01:15:29 ◼   ► And then also tech leaders speaking out and taking stances one way or another, pro and

01:15:35 ◼   ► con and well very little pro, but how far con is a good question about how many of them

01:15:41 ◼   ► have responded.

01:15:43 ◼   ► And I just get, I mean I've gotten hate mail, I mean I always get hate mail, but I've gotten

01:15:49 ◼   ► a lot over this.

01:15:50 ◼   ► And people are like, "Why are you talking about politics?

01:15:52 ◼   ► I don't come to you for that."

01:15:54 ◼   ► People accusing us of being partisan in one direction or another depending on what article

01:15:58 ◼   ► gets published and all this stuff. And, you know, I just ignore most of it. I may end

01:16:04 ◼   ► up saying something about it at some point, but the long and short of it is that this

01:16:08 ◼   ► is not a tech issue, it's not a politics issue, it's like a human issue. Like if you're a

01:16:15 ◼   ► human, you should be interested in this stuff. And to be fair to our readers, like, I'm not

01:16:21 ◼   ► instructing our writers and our writers are not doing it. They're not writing about stuff

01:16:25 ◼   ► from a pure politics standpoint. We're not politico. Like, we're not just going like,

01:16:29 ◼   ► "Hey, politics happened and look at politics." You know, we're definitely relating it to

01:16:33 ◼   ► our industry, but the tech--I mean, the stuff that he's--that he's talking about with immigration

01:16:39 ◼   ► and, you know, possible reduction or clamping down on H-1B visas which allow highly skilled

01:16:47 ◼   ► tech workers to come over here, those are incredibly germane to the tech industry. From

01:16:51 ◼   ► everybody from Apple to Google to Facebook and everybody else uses an enormous amount

01:16:56 ◼   ► of H1B workers because there are a lot of highly skilled programmers that come from

01:17:02 ◼   ► India, elsewhere in Asia and, you know, a wide variety of other countries that aren't

01:17:08 ◼   ► here because our education system has a lot of flaws. So it's an incredibly germane issue

01:17:14 ◼   ► and they're, you know, they're up in arms about it or, you know, up in some kind of

01:17:18 ◼   ► arms, depending on how closely they're colluding with the current administration.

01:17:21 ◼   ► Yeah, and they're doing the right thing where they've, all these big companies, the Googles,

01:17:28 ◼   ► Apples, Microsofts, it's inevitable with the head counts that they have that they have hundreds of

01:17:34 ◼   ► employees who are affected by this, that somewhere along the chain of their passport that they

01:17:40 ◼   ► were born in or were once or still are a citizen of one of these seven countries.

01:17:47 ◼   ► and might literally be out of the country right now

01:17:52 ◼   ► in the way that this was implemented with.

01:17:54 ◼   ► I just signed it and even if you're in the air right now,

01:17:57 ◼   ► your band is, it's great that the companies

01:18:01 ◼   ► have their employees' backs and are helping them,

01:18:02 ◼   ► but it's interesting.

01:18:05 ◼   ► I don't know, I don't, and I thought it was,

01:18:08 ◼   ► I thought Tim Cook's statement

01:18:12 ◼   ► could have been a little stronger.

01:18:13 ◼   ► Like, I'm not expecting him to lash out.

01:18:17 ◼   ► And I'm obviously, it's no secret that I am

01:18:20 ◼   ► violently, virulently against Trump,

01:18:24 ◼   ► and I see him as a danger and a menace, personally.

01:18:27 ◼   ► But even so, I totally get that Tim Cook,

01:18:30 ◼   ► or the CEO, anybody in a position like that, can't be.

01:18:34 ◼   ► Even though I would certainly suspect privately

01:18:36 ◼   ► that he is, based on everything we know about him,

01:18:39 ◼   ► and who his personal heroes are.

01:18:40 ◼   ► I get it.

01:18:43 ◼   ► And I see people on Twitter who are,

01:18:46 ◼   ► you know, who want him to be, you know, like a completely outspoken critic. I see how he can't,

01:18:52 ◼   ► but I still think his statement could have been a little bit stronger. And in terms of,

01:18:56 ◼   ► it's like the old adage that like when you're, you know, collaborating with people that you work

01:19:02 ◼   ► with, or you're in school and you're doing a crit, you criticize the work, not the person.

01:19:05 ◼   ► So I don't expect him to come out strongly against Trump personally, but I think he could have come

01:19:11 ◼   ► out a little stronger against the executive order on immigration.

01:19:18 ◼   ► Yeah, and you've got a variety of people. It was interesting, one thing here, here's

01:19:25 ◼   ► like a little inside, not super inside baseball, but inside baseball in a way. If you look

01:19:30 ◼   ► at the statements that were released, there was like, especially early on, there was only

01:19:35 ◼   ► a couple of people that went on the record and just said stuff. Said, "Hey, this is

01:19:40 ◼   ► and here's what I have to say about it.

01:19:42 ◼   ► And there were a lot of leaked memos.

01:19:44 ◼   ► Even Tim Cook's was not a public statement.

01:19:47 ◼   ► It was a quote unquote leaked memo, right?

01:19:49 ◼   ► Couple of publications got it.

01:19:52 ◼   ► We ended up getting it.

01:19:53 ◼   ► The origin of those memos is often debated

01:19:59 ◼   ► among various journalists.

01:20:00 ◼   ► Hey, did you get this?

01:20:01 ◼   ► Where did you get this?

01:20:02 ◼   ► And people are like, sawed off.

01:20:04 ◼   ► I'm not gonna tell you.

01:20:05 ◼   ► But where those come from is an interesting thing

01:20:09 ◼   ► Because a leaked memo is essentially,

01:20:11 ◼   ► we wanna say this, but we don't wanna make

01:20:13 ◼   ► a public statement about it because we're a public company

01:20:15 ◼   ► and this has a lot of ramifications.

01:20:17 ◼   ► And a statement, an on the record statement,

01:20:20 ◼   ► is a I feel very strongly personally about this,

01:20:23 ◼   ► come at me bro, right?

01:20:25 ◼   ► And that is a, there's a difference, right,

01:20:28 ◼   ► in impact, I feel.

01:20:30 ◼   ► And eventually, a lot of the CEOs,

01:20:32 ◼   ► a lot of the tech companies ended up having a,

01:20:36 ◼   ► some sort of public personal statement about it.

01:20:39 ◼   ► Satya Nadella posted on LinkedIn,

01:20:41 ◼   ► Mark Zuckerberg posted on Facebook, so on and so forth.

01:20:48 ◼   ► And those statements, I mean,

01:20:50 ◼   ► Sergey Brin showed up at the protest at SFO.

01:20:53 ◼   ► And he said, this is not a company thing,

01:20:55 ◼   ► I'm here as an immigrant, as a person.

01:20:57 ◼   ► But then of course the employee rally

01:20:59 ◼   ► and then Google was supportive of that,

01:21:02 ◼   ► about the ban or whatever you wanna call the order.

01:21:07 ◼   ► - Right.

01:21:09 ◼   ► - Semantics are being debated as we speak.

01:21:12 ◼   ► But that was interesting to me,

01:21:15 ◼   ► to view the spectrum of people who were at least,

01:21:19 ◼   ► I don't know if you wanna call it comfortable,

01:21:20 ◼   ► but felt passionately enough about it

01:21:23 ◼   ► to put it on the record in their own voice

01:21:25 ◼   ► and go out there versus the people who weren't.

01:21:27 ◼   ► And it could spell caution, it could spell calculation.

01:21:31 ◼   ► There are a lot of ways to take it.

01:21:33 ◼   ► It just depends on how you look at it.

01:21:34 ◼   ► - Yeah.

01:21:37 ◼   ► - One weekend.

01:21:38 ◼   ► - I know, it is honestly, you know, yeah.

01:21:44 ◼   ► I mean, there's a lot here that doesn't really feel,

01:21:47 ◼   ► there's a lot of it here that seems to very clearly

01:21:51 ◼   ► to be coming from Steve Bannon.

01:21:53 ◼   ► Bannon's tenure at Breitbart and the publications bent,

01:21:59 ◼   ► it's very clear that these are all things

01:22:02 ◼   ► that he feels very strongly personally about.

01:22:05 ◼   ► How much of those feelings that Trump shares

01:22:07 ◼   ► will be a very interesting historical account to read.

01:22:10 ◼   ► - Right.

01:22:11 ◼   ► - If we ever figure that out,

01:22:13 ◼   ► how closely their views are aligned,

01:22:15 ◼   ► or if Bannon is able to just push forth his views

01:22:19 ◼   ► and make them Trump's views.

01:22:22 ◼   ► But it seems very clear that these attitudes

01:22:25 ◼   ► towards immigration and towards a variety

01:22:27 ◼   ► of other government institutions

01:22:29 ◼   ► very strongly held by Bannon,

01:22:31 ◼   ► and this rapid application of the exact

01:22:36 ◼   ► the executive order, which Republicans were so angry

01:22:40 ◼   ► that Obama utilized, even though he utilized them

01:22:42 ◼   ► far less than say Reagan or someone else.

01:22:46 ◼   ► It is very interesting to see what the ramifications

01:22:51 ◼   ► of this very fast and loose application of these orders

01:22:55 ◼   ► that obviously had far less, let's put it this way,

01:22:59 ◼   ► it's very clear they had far less vetting

01:23:02 ◼   ► from the appropriate agencies

01:23:04 ◼   ► previous executive orders.

01:23:06 ◼   ► - Right.

01:23:07 ◼   ► - You know, from the agents, affected agencies,

01:23:08 ◼   ► or agencies responsible for their execution.

01:23:11 ◼   ► So, and this is not a politics thing,

01:23:13 ◼   ► this is like a logistics thing,

01:23:15 ◼   ► or if you're looking at the government as a business,

01:23:18 ◼   ► which Trump has said he does,

01:23:20 ◼   ► it's very interesting to see this kind of business

01:23:22 ◼   ► being conducted, and what the ramifications of it will be.

01:23:26 ◼   ► Given that we are a weekend, and we're already exhausted,

01:23:29 ◼   ► it is definitely going to be interesting to see

01:23:32 ◼   ► how people maintain their vigilance that these things are handled according to the rule of

01:23:37 ◼   ► law and according to appropriate procedure and process. Because fugue is a real thing,

01:23:44 ◼   ► you know, I mean, or fatigue is a real thing, you know, you just, at some point you can't

01:23:48 ◼   ► keep up.

01:23:49 ◼   ► It's so fatiguing that you've mispronounced it. I thought one of the most telling, we're

01:23:54 ◼   ► in Nunday and there's so much good writing that's going on, it's hard to keep up with

01:23:57 ◼   ► all of it, but one of the most telling things, I did, I actually noted this back in the campaign,

01:24:02 ◼   ► remember this but there were a couple you know when it was clear that the Steve Bannon was going

01:24:05 ◼   ► to be so or was so influential in his campaign and then after the election when he we found out that

01:24:11 ◼   ► the this guy won that he was going to be a top advisor um uh Trump had been a guest on Bannon's

01:24:18 ◼   ► radio show uh I guess it's not a podcast I think it's on some kind of actual radio network but

01:24:24 ◼   ► Bannon had a show uh and one of the times that Trump was on they talked about uh they were

01:24:31 ◼   ► talking about immigration. And Trump was, this is where they differed, where Trump was arguing more

01:24:36 ◼   ► or less that he wanted to make it easier for when immigrants come and go to our universities and

01:24:44 ◼   ► become experts in science or whatever other fields they are, that it would be better for the country

01:24:49 ◼   ► to figure out a way to keep them here with their newly found US expertise than to have them leave

01:24:55 ◼   ► again. And Bannon, you know, he was like, you agree with that, right? And Bannon's argument

01:24:59 ◼   ► was that there's something to the,

01:25:01 ◼   ► it didn't quite say it was a problem,

01:25:03 ◼   ► but you could tell that's where he was going,

01:25:04 ◼   ► that when 2/3 or 3/4 of the CEOs in Silicon Valley

01:25:07 ◼   ► are from Asia or South Asia, that's a problem.

01:25:12 ◼   ► And you know, (laughs)

01:25:14 ◼   ► there's no way to avoid it.

01:25:16 ◼   ► I mean, either you look at something and you see like

01:25:19 ◼   ► Sundar Pichai, who was born in India,

01:25:23 ◼   ► is the CEO of one of the most successful companies

01:25:27 ◼   ► in the history of the United States.

01:25:29 ◼   ► You either see that as a great success,

01:25:32 ◼   ► I mean, I just, there's no common ground.

01:25:34 ◼   ► I see this as that Sundar Pichai is proof

01:25:37 ◼   ► that the system works and that our country can be great.

01:25:40 ◼   ► And Steve Bannon holds it up as a problem

01:25:43 ◼   ► to be, that needs a solution.

01:25:45 ◼   ► And I don't know, I don't see how--

01:25:47 ◼   ► - Yeah, I think you referred to it as a cultural,

01:25:49 ◼   ► that it refers to our culture,

01:25:52 ◼   ► that we have to maintain a certain culture.

01:25:54 ◼   ► And then the question then becomes,

01:25:55 ◼   ► you mean white culture, right?

01:25:57 ◼   ► like do you mean, you mean that the European people who came over and killed off the natives,

01:26:03 ◼   ► like those are the folks that are the best. Excuse me. Those are the folks that are the

01:26:07 ◼   ► best and those, that's the culture we need to maintain. And you know, I mean I think

01:26:13 ◼   ► that you have to take that stuff at face value. And I think that was, I think you wrote something

01:26:19 ◼   ► about this but, you know, everybody that was saying, even Peter Thiel said this, nobody

01:26:24 ◼   ► really believed him at the time, but it really looks pretty gross in retrospect, you know,

01:26:30 ◼   ► in terms of a gross miscalculation or gross dissembling of the truth. And that is that,

01:26:38 ◼   ► you know, you don't take him literally. Right? Don't take Trump literally. Take him at his

01:26:45 ◼   ► intent, not his word or whatever the, you know, saying was. But it's become very clear that you

01:26:50 ◼   ► have to take this stuff literally. So if you look at statements like that, you go, okay,

01:26:54 ◼   ► well, you know, if this person's, you know, policies or whatever are enacted, then, you

01:27:01 ◼   ► know, their goal is to create a safe space for white people in America and then to, you

01:27:08 ◼   ► know, destroy as much of the current government establishment as possible because they view

01:27:16 ◼   ► it as corrupt or unnecessary. Because he says he views himself as a Leninist or whatever.

01:27:22 ◼   ► And he'd like to, this is Bannon, like to tear down as much of the existing government as possible.

01:27:29 ◼   ► So you look at things like that and you can look at them, hey, you know, oh, I'm intellectually

01:27:33 ◼   ► curious about what this person's views are and, you know, where this gentleman is coming from.

01:27:37 ◼   ► And then you can look at the stuff that's happened in the last week and you can go,

01:27:42 ◼   ► "Oh, maybe I should take this as a statement of fact,

01:27:45 ◼   ► "and not a statement of philosophy or game theory."

01:27:50 ◼   ► And I think that that is a very scary proposition.

01:27:54 ◼   ► - I have a theory on that front.

01:27:57 ◼   ► And it is as much a hope as a,

01:28:01 ◼   ► well, I can't prove it, but it's certainly what I hope

01:28:05 ◼   ► in terms of the sustainability of this administration.

01:28:10 ◼   ► It's a fact that according to polls,

01:28:12 ◼   ► he is the least popular incoming president

01:28:15 ◼   ► in modern history, meaning in the history

01:28:18 ◼   ► of the Gallup poll and modern polling technology.

01:28:20 ◼   ► And with just about every previous,

01:28:24 ◼   ► or in fact, not just about,

01:28:25 ◼   ► with every previous elected new president,

01:28:28 ◼   ► there is this grace period after the election

01:28:32 ◼   ► where as soon as the election's over, here's the winner,

01:28:36 ◼   ► congratulations, and the campaigning stops,

01:28:39 ◼   ► there is a groundswell of support

01:28:41 ◼   ► and their popularity grows.

01:28:43 ◼   ► They enter office with an approval rating that is higher.

01:28:46 ◼   ► This was true for Reagan, this was true for Carter,

01:28:50 ◼   ► Bill Clinton, George W. Bush, George H.W. Bush.

01:28:55 ◼   ► It's always been true and it's not true with Trump.

01:28:58 ◼   ► Trump's popularity and approvals went down

01:29:00 ◼   ► between the election and starting.

01:29:02 ◼   ► And amazingly, his Gallup approval rating went down

01:29:07 ◼   ► eight points in his first week as president,

01:29:09 ◼   ► which just doesn't happen.

01:29:11 ◼   ► And again, I don't know, but I've probably lost everybody,

01:29:15 ◼   ► anybody who was listening who was a Trump supporter,

01:29:19 ◼   ► but I think I lost 'em a while ago.

01:29:22 ◼   ► But here's the hope for someone who's opposed to Trump,

01:29:24 ◼   ► is my theory is that Trump had a coalition of voters

01:29:29 ◼   ► who half of them, let's say roughly,

01:29:33 ◼   ► loved every literal word he said.

01:29:36 ◼   ► They wanted to lock her up, they wanted to build a wall,

01:29:38 ◼   ► they wanted to make Mexico pay for the wall

01:29:41 ◼   ► that they didn't want.

01:29:42 ◼   ► They wanted to ban Muslims from the country.

01:29:46 ◼   ► And then the other half were the Peter Thiel type,

01:29:49 ◼   ► and which is why I wrote about it, which is the,

01:29:52 ◼   ► you can't take this guy literally.

01:29:54 ◼   ► He says these things 'cause they sound good,

01:29:56 ◼   ► he's a showman, he's not gonna do any of this stuff.

01:29:59 ◼   ► Just think of the vague intent, you know,

01:30:02 ◼   ► Thiel's description, and it's so funny

01:30:04 ◼   ► that he picked up on the ban the Muslims was that,

01:30:09 ◼   ► oh yeah, he just says that, but what he really means

01:30:11 ◼   ► is they're gonna have a sane,

01:30:13 ◼   ► they're just gonna have a saner, smarter immigration policy.

01:30:15 ◼   ► Well, this immigration policy is insane,

01:30:18 ◼   ► and it's not smarter.

01:30:19 ◼   ► It's poorly written, it's hard to execute.

01:30:22 ◼   ► I think what's happening with Trump's approval

01:30:24 ◼   ► is that the people, the only people he's gonna be left with

01:30:27 ◼   ► are the group that wanted him to be taken literally,

01:30:29 ◼   ► and that the group who didn't wanna take him literally

01:30:32 ◼   ► and just assumed that he wouldn't are a jumping ship,

01:30:35 ◼   ► because now they see that he actually is doing these things.

01:30:38 ◼   ► And I don't think that there's widespread support for them.

01:30:41 ◼   ► - Yeah, yeah, it is, I mean, there's like a couple of,

01:30:49 ◼   ► there's a couple of accounts on Twitter

01:30:51 ◼   ► sort of collating regretful Trump voters,

01:30:55 ◼   ► who, you know, are expressing their,

01:30:58 ◼   ► there's one today that's, you know, hundreds of tweets long,

01:31:02 ◼   ► sort of before and after tweets. The first it's like clipping the, I'm afraid I don't

01:31:07 ◼   ► remember the account right now, but they're clipping the before tweet, you know, when

01:31:11 ◼   ► they're like, "Oh, Trump is going to X and Y and, you know, trust him." And then the

01:31:16 ◼   ► after where it's like, "He's not going to do this at all. I'm not, now I'm not going

01:31:19 ◼   ► to have healthcare or whatever." And I think that there is, there's a schadenfreude in

01:31:23 ◼   ► that but there's also like, when people say you have to see the other side and or, you

01:31:31 ◼   ► know, cross borders to make that. It always seems like it's always one side having to

01:31:35 ◼   ► cross those borders. But I honestly think there's opportunity there to not be like Nelson

01:31:41 ◼   ► Haha and be like, "Look, you were fooled. Now let's fix it." Right? And unfortunately,

01:31:50 ◼   ► you know, for many people, unfortunately for especially for people who are very solidly

01:31:54 ◼   ► were very solidly Hillary Clinton supporters or whatever, fixing it is going to end up

01:32:00 ◼   ► with Pence in power. I mean the worst case scenario is that, you know, for those folks

01:32:04 ◼   ► is definitely Bannon stays in power and implements his true strategy, which he laid out very

01:32:10 ◼   ► explicitly and you have to believe he wants those things because he's, you know, written

01:32:16 ◼   ► and influenced all of the other stuff so far that's matched up one for one. And so that's

01:32:22 ◼   ► your worst case scenario. But your best case scenario is Pence, which, you know, Pence

01:32:27 ◼   ► does not share liberal values at all, right? I mean, he's very far right. You would consider

01:32:33 ◼   ► him one of the farthest right if it wasn't for the Bannon-Trump conglomerate, right?

01:32:41 ◼   ► So yeah, it's gonna be a rough four years, I think, for anybody. Well, rough two, maybe,

01:32:46 ◼   ► if this groundswell of disapproval and/or, you know, activity or activism is able to

01:32:56 ◼   ► to carry for two years, you get into the midterm elections

01:33:01 ◼   ► and maybe the checks and balances are back in place

01:33:05 ◼   ► where some sort of middle ground is found

01:33:07 ◼   ► between the two halves of the country.

01:33:09 ◼   ► Literally almost two halves of the voting public, right?

01:33:12 ◼   ► So it's definitely, it's at times like this

01:33:17 ◼   ► where you realize just how important

01:33:20 ◼   ► to the balance of the force, so to speak,

01:33:24 ◼   ► those checks and balances are.

01:33:25 ◼   ► when they're not there anymore,

01:33:27 ◼   ► it's a very sudden cold bath.

01:33:29 ◼   ► - Yep, and I don't think we're at the end of it

01:33:33 ◼   ► and in terms of issues that'll just pop up,

01:33:35 ◼   ► unexpectedly, that draw the industry

01:33:41 ◼   ► that we cover into it directly.

01:33:44 ◼   ► I mean, there's gonna be something.

01:33:45 ◼   ► I mean, for example, I mean, Trump was harping about it

01:33:48 ◼   ► a year ago with the San Bernardino case

01:33:50 ◼   ► and Apple's studied refusal to give the FBI,

01:33:55 ◼   ► not to go down that whole story again,

01:33:58 ◼   ► but they didn't wanna give them an OS to unlock the phone,

01:34:02 ◼   ► and it's gonna be a little different

01:34:04 ◼   ► when Trump is the president instead of just the candidate,

01:34:07 ◼   ► and he's fighting back against it.

01:34:09 ◼   ► So I'm sure we'll go down that path again.

01:34:11 ◼   ► - Yeah, I mean, cybersecurity is the next big thing,

01:34:15 ◼   ► so we'll see.

01:34:16 ◼   ► - All right, briefly, 'cause I know we've gone for a while.

01:34:18 ◼   ► - Oh, but Giuliani's in charge, so we're fine.

01:34:19 ◼   ► - One last thing I just wanted to touch on.

01:34:22 ◼   ► I don't know how many years now you've been going,

01:34:25 ◼   ► but last week you were at Sundance in Utah.

01:34:27 ◼   ► - Yeah, mm-hmm.

01:34:29 ◼   ► - And so tell me about it.

01:34:33 ◼   ► Tell me, it seems like you really

01:34:35 ◼   ► have a good time out there.

01:34:37 ◼   ► - Yeah, so I haven't been going as long as some folks.

01:34:40 ◼   ► I mean, obviously it's been going on for decades,

01:34:42 ◼   ► but I started going in 2013,

01:34:49 ◼   ► 2012, 2013, somewhere in there. So for a few years now I've been going every year and I

01:34:54 ◼   ► like it a lot. I mean it's, you know, I like everything about it. There's, you go to this

01:34:59 ◼   ► town in Utah, Park City, which is, this, uh, it covers Salt Lake City, Park City, and a

01:35:06 ◼   ► couple of other small venues like Robert Redford's house and personal screening room and some

01:35:11 ◼   ► other things. He's got a whole conclave up there. The dude basically just owns this whole

01:35:18 ◼   ► town. It's really funny. But it's a, you go, it's in the snow. There's nothing else to

01:35:26 ◼   ► do but watch movies and eat. You're kind of locked in. I mean, you could ski and stuff.

01:35:32 ◼   ► I never do. I always tell myself, "Oh, I'm going to take an afternoon or whatever." But

01:35:36 ◼   ► there always seems to be something to see or something to do. But you go and you're

01:35:41 ◼   ► snow locked in this little town. Everybody there is there to see movies. There are like

01:35:48 ◼   ► 60, 70 movies that play every day across all the venues. You can only see three or four

01:35:53 ◼   ► of them a day. I mean, that's if you pack them in.

01:35:54 ◼   ► Right?

01:35:55 ◼   ► How do you decide? How do you, I mean, what do you do? Do you get like a, is there just

01:35:58 ◼   ► like a, here you get like a pass and here's a list of all the movies and you just go through

01:36:03 ◼   ► and pick them?

01:36:04 ◼   ► Yeah, it's different for pass holders. So if you're a pass holder, you buy a package

01:36:09 ◼   ► which gives you access to certain kinds of tickets and so many tickets a day or whatever

01:36:13 ◼   ► the case, right? And you know, those past holders get some nice perks like they get

01:36:17 ◼   ► to go in and get seated first in the theater and whatnot. But I go as press because I do

01:36:21 ◼   ► cover a variety of things. Like last year, for instance, the documentary that Werner

01:36:27 ◼   ► Herzog, documentary on the Internet, you know, and the kind of impact of the Internet was

01:36:33 ◼   ► showing there. So I got to interview him and wrote about that for TechCrunch. And so, when

01:36:38 ◼   ► I can, they've more and more stuff there is interactive with VR and AR versus just films.

01:36:44 ◼   ► So when I go, I always find something to write about for TechCrunch and it's fun to go as

01:36:50 ◼   ► press because you get, you sign up, you get your press pass. Your press pass allows you

01:36:55 ◼   ► to see any press screening. They have essentially one for theater multiplex where it runs press

01:37:01 ◼   ► PNI screenings all day. So press in industry. So you can go to any of those, just get in

01:37:05 ◼   ► line and go in and watch those. And then you can also wait list for any movie throughout

01:37:11 ◼   ► the day. Wait listing is essentially they have a little app and when the waitlist thing

01:37:16 ◼   ► turns on, you hit go and it assigns you a number. And so the overflow seating which

01:37:20 ◼   ► they have between 40 and 100 to 200 seats on every theater assigned to the waitlist,

01:37:25 ◼   ► you could possibly get in if you don't have a ticket. You buy your ticket for $20, each

01:37:30 ◼   ► movie ticket is $20 and then you go in and see this movie that nobody's ever seen. So

01:37:34 ◼   ► So it's kind of a good deal for like local residents and folks that don't have ticket

01:37:38 ◼   ► packages.

01:37:39 ◼   ► But for the press, you sign up, you get your press pass which allows you to do all that.

01:37:43 ◼   ► Then you get 10 free complimentary tickets over the course of the show and then you can

01:37:47 ◼   ► request between one and two tickets every day via the press office in the morning.

01:37:52 ◼   ► So everybody rushes down and says, "Oh, I'm trying to see this or that."

01:37:55 ◼   ► And they sell out of those tickets once they sell out and that's it.

01:37:58 ◼   ► So in general, like this last time, I don't have my stubs in front of me to count, but

01:38:02 ◼   ► but I think I saw, I got there Thursday

01:38:05 ◼   ► and left Tuesday morning, it was a short trip for me,

01:38:08 ◼   ► and I saw I think 20 movies in that space of time,

01:38:11 ◼   ► and then a bunch of VR exhibits.

01:38:13 ◼   ► So, I mean, you pack it in, you're there,

01:38:15 ◼   ► you might as well, I mean, I do anyway.

01:38:18 ◼   ► Different people handle it differently.

01:38:19 ◼   ► The film journalists usually stay there

01:38:21 ◼   ► for a week or even two, because it runs two weeks,

01:38:26 ◼   ► and that second week is, or second weekend/week is great,

01:38:30 ◼   ► because nobody's there.

01:38:31 ◼   ► I've gone in the second week some years and it's purely about the movies. The stars have

01:38:38 ◼   ► all left to go back to their lives or wherever. The first week, every show you go to, the

01:38:44 ◼   ► director or the actors or everybody involved is there. You get to see it essentially with

01:38:50 ◼   ► the people that made the movie, including down to the grips and camera guys or whoever

01:38:54 ◼   ► else came. And then there's Q&As after every movie. So you get to talk to the filmmakers

01:39:00 ◼   ► about their motivations and all that stuff,

01:39:03 ◼   ► person to person right there.

01:39:04 ◼   ► So it's pretty fun.

01:39:05 ◼   ► - What was the best movie that you saw?

01:39:08 ◼   ► Can you pick one?

01:39:09 ◼   ► Do you have a handful?

01:39:11 ◼   ► - Yeah, I'm gonna write about it too.

01:39:13 ◼   ► Yeah, yeah, there's a couple that I found really good.

01:39:15 ◼   ► I mean, there's a couple that are non-tech related

01:39:17 ◼   ► that I saw while I was there.

01:39:19 ◼   ► The Big Sick, which is Kumail Nanjiani.

01:39:22 ◼   ► He wrote that with his wife about their experiences.

01:39:26 ◼   ► Kumail's one of the guys from Silicon Valley.

01:39:30 ◼   ► he plays one of the programmers. Very good. And you'll hear about this. I think Netflix

01:39:35 ◼   ► bought them, actually. So you should be able to watch it on Netflix. I don't know if they're

01:39:38 ◼   ► going to release it theatrically or directly on Netflix. But Netflix and Amazon were big,

01:39:44 ◼   ► enormous presences there. They bought a ton of movies. This is like, for 2013, there was

01:39:52 ◼   ► just like rumblings that Netflix is like poking around, like there are people here. And then

01:39:57 ◼   ► year after year, they got to be more and more of a presence until this year. It was like,

01:40:01 ◼   ► you know, they were some of the biggest purchasers at the show and they were on everybody's lips. And

01:40:07 ◼   ► many of the movies that premiered there had already been pre-purchased by Netflix and things

01:40:10 ◼   ► like that. So it's, you know, my world was colliding with Sundance's world at a rapid

01:40:17 ◼   ► pace over the last several years. And it's got to be, it has to be from their perspective,

01:40:21 ◼   ► a lower risk way because these are movies that are already made, you know, that and it, you know,

01:40:26 ◼   ► that you could say, look, and there's some subjectiveness

01:40:29 ◼   ► to it where obviously whoever it is from Netflix

01:40:32 ◼   ► is watching the movie and saying, yeah, this is good,

01:40:34 ◼   ► and making a subjective judgment that this is a good movie

01:40:38 ◼   ► or good enough that we should think about buying it.

01:40:40 ◼   ► But then once they do, the risk is so much lower

01:40:42 ◼   ► than backing something when it's just a screenplay,

01:40:46 ◼   ► and there's so much uncertainty, who are you gonna get,

01:40:49 ◼   ► who can you cast, is it gonna come together?

01:40:51 ◼   ► So it doesn't surprise me at all.

01:40:54 ◼   ► - Yeah, you have a sort of fixed price.

01:40:55 ◼   ► - Right.

01:40:56 ◼   ► - Right.

01:40:57 ◼   ► And like last, every time I go,

01:40:58 ◼   ► one of my favorite things to do is when I'm in line,

01:41:01 ◼   ► I just talk to people.

01:41:02 ◼   ► Because in general, these are film industry people

01:41:05 ◼   ► that are there.

01:41:05 ◼   ► I mean, they're fans too, right?

01:41:07 ◼   ► Just folks that wanna see movies.

01:41:09 ◼   ► But like I talked to Academy Award winning producers

01:41:12 ◼   ► that are just standing in line

01:41:13 ◼   ► and we just have a discussion, right?

01:41:15 ◼   ► Because they're waiting to see some new thing

01:41:17 ◼   ► and they're like, "Oh yeah, I hear it's great," or whatever.

01:41:19 ◼   ► And I talked to them about their next project

01:41:22 ◼   ► and about the industry and blah, blah, blah.

01:41:24 ◼   ► And I talked to buyers and producers,

01:41:28 ◼   ► and when they're talking about Netflix and Amazon,

01:41:31 ◼   ► they're talking about, I asked them,

01:41:33 ◼   ► "Hey, is this a challenge to you?

01:41:35 ◼   ► "Do you view it as an invasion or whatever?"

01:41:37 ◼   ► In general, the response has been very positive.

01:41:41 ◼   ► I mean, they're like, "Hell no.

01:41:42 ◼   ► "For us, it's a way to tell a filmmaker,

01:41:44 ◼   ► "look, you can use these people to make your next movie.

01:41:47 ◼   ► "In other words, sell this movie.

01:41:49 ◼   ► "You're not gonna be rich off of it or whatever.

01:41:52 ◼   ► "You're gonna make a decent deal."

01:41:54 ◼   ► neither Amazon and Netflix are overpaying right now for movies simply because A) they

01:41:59 ◼   ► have the money and B) they're sort of trying to build momentum. But they're also enabling

01:42:05 ◼   ► filmmakers to just boom, like sell that and then make another movie. You move on to your

01:42:12 ◼   ► next project and then it allows them to build a body of work. And it's just like a new plug

01:42:16 ◼   ► and play distributor that they're able to just go and say Netflix comes with their corpus

01:42:23 ◼   ► of data that says this is what we know works.

01:42:26 ◼   ► Amazon comes with their deep pockets and says,

01:42:28 ◼   ► hey, we're gonna release you theatrically.

01:42:29 ◼   ► Like they're different playbooks.

01:42:30 ◼   ► They're not just like bland entities

01:42:33 ◼   ► that handle things the same way.

01:42:34 ◼   ► They definitely distribute them very differently.

01:42:37 ◼   ► But new opportunities for filmmakers.

01:42:40 ◼   ► - Any other movies you wanna give a shout out to

01:42:42 ◼   ► other than The Big Sick?

01:42:43 ◼   ► - Yeah, Marjorie Prime.

01:42:44 ◼   ► I really, really liked it.

01:42:46 ◼   ► Marjorie Prime is a movie that stars

01:42:51 ◼   ► John Hamm, Gina Davis, who else?

01:42:56 ◼   ► Tim Robbins is in it as well.

01:43:04 ◼   ► So I mean like, you know, all star cast.

01:43:07 ◼   ► I mean it's directed by this guy named Michael Amareja,

01:43:12 ◼   ► I think, Amareja, I might mispronounce it.

01:43:15 ◼   ► He directed Hamlet, I don't remember, with Ethan Hawke.

01:43:19 ◼   ► - Yes, I do remember that.

01:43:20 ◼   ► But the movie stars Lois Smith, and Lois Smith is a very venerable actress. You have

01:43:26 ◼   ► seen her. You listeners out there, you have seen her in something, trust me. I don't

01:43:32 ◼   ► know if you remember East of Eden. She was in that. She's been in the biz a long time.

01:43:40 ◼   ► I think she's 85, 86 now. But she's been in tons of stuff that people have seen like

01:43:46 ◼   ► fried green tomatoes and Twister and, you know, True Blood and all kinds of stuff, right?

01:43:51 ◼   ► Pete: Yeah.

01:43:51 ◼   ► J

01:44:03 ◼   ► by the guy who they adapted the screenplay off of.

01:44:06 ◼   ► And she's played that character twice

01:44:08 ◼   ► in two runs of that play,

01:44:10 ◼   ► and then this director directed her

01:44:12 ◼   ► in this movie version of that play.

01:44:15 ◼   ► And she's an older woman who's losing her cognitive ability,

01:44:19 ◼   ► and her family purchases her an AI called the Prime.

01:44:23 ◼   ► And that Prime is there to talk with her

01:44:27 ◼   ► and to help her to keep those memory pathways active, right?

01:44:32 ◼   ► to help her relive her life and talk about her memories. So Jon Hamm plays her husband

01:44:40 ◼   ► in his younger state because that's the way she wanted to remember him. And the Prime

01:44:45 ◼   ► is set up to engage with her and ask her about her life and to learn. So when she talks to

01:44:50 ◼   ► it, it learns about her life, essentially learning to be more human and more like him.

01:44:55 ◼   ► But the themes, obviously the AI, you know, component of it is a huge portion of the theme.

01:45:02 ◼   ► themes I found absolutely just spellbinding. I mean, I was barely breathing by the end

01:45:08 ◼   ► of it. And it's not a very--it's not a thriller by any means. You know, it's an extremely

01:45:12 ◼   ► calm meditative movie that I found to be extremely well-acted, full of nuance, and addressed

01:45:19 ◼   ► some really, really interesting topics about AI, the way it will affect us, the way that

01:45:27 ◼   ► humans can sort of impart their being to AI in the future or may impart them if it ever

01:45:32 ◼   ► gets to that point. You know, it's very, very interesting. I highly recommend checking it

01:45:37 ◼   ► out when it comes out. I think maybe Netflix bought it.

01:45:39 ◼   ► It sounds right up my alley. I feel like we're entering a golden age as Hollywood devolves

01:45:45 ◼   ► into nothing but sequels to franchises and $300 million budgets and the expectation that

01:45:53 ◼   ► the last two-thirds of the movie is gonna be blowing up

01:45:56 ◼   ► a city every single time.

01:45:58 ◼   ► We're entering like a golden age of smaller budget,

01:46:03 ◼   ► what used to be called indie movies,

01:46:05 ◼   ► I don't know what you wanna call 'em now,

01:46:06 ◼   ► but outside Hollywood and outside the blockbuster mindset

01:46:10 ◼   ► of science fiction, and a lot of 'em,

01:46:13 ◼   ► I mean, and it's no surprise that people are thinking

01:46:15 ◼   ► about AI because it's starting to get real.

01:46:19 ◼   ► And it's so great, it is so refreshing to see movies

01:46:22 ◼   ► about AI that have gotten away from AI that goes bad

01:46:26 ◼   ► and takes over the planet, right?

01:46:28 ◼   ► - Exactly, yeah, that's what you normally see.

01:46:30 ◼   ► And I mean, the one thing, one thing I will say,

01:46:33 ◼   ► this might be an interesting to people listening,

01:46:36 ◼   ► is that the mood at Sundance this year,

01:46:39 ◼   ► I mean, like I said, I'm not claiming to be

01:46:41 ◼   ► some historian of Sundance, but the mood this year

01:46:44 ◼   ► compared to years past, because remember,

01:46:47 ◼   ► the inauguration was happening on that Friday

01:46:50 ◼   ► of the beginning of the festival.

01:46:52 ◼   ► And all this stuff started happening.

01:46:54 ◼   ► The first executive actions and stuff started being passed

01:46:59 ◼   ► and all this and people were realizing just how much

01:47:02 ◼   ► Trump was going to be the Trump he promised to be.

01:47:05 ◼   ► And the mood at Sundance was insane.

01:47:08 ◼   ► I mean, it was somber and meditative and defiant.

01:47:10 ◼   ► And it was artists being artists, just saying like,

01:47:15 ◼   ► we're not gonna give up the light, we're gonna push

01:47:17 ◼   ► and we're gonna tell stories and we're going to help

01:47:20 ◼   ► unify via those stories.

01:47:22 ◼   ► Redford and various programmers made comments

01:47:25 ◼   ► as I was sitting in screenings and things like that

01:47:28 ◼   ► about telling challenging and difficult stories

01:47:32 ◼   ► and not letting up on that.

01:47:34 ◼   ► It just seemed very, very interesting,

01:47:36 ◼   ► very unified in its emotion.

01:47:41 ◼   ► And then years passed, it was all over the place.

01:47:43 ◼   ► People have different thoughts and feelings,

01:47:45 ◼   ► but it seemed very, very interesting to me.

01:47:47 ◼   ► So it'll be interesting to see how artists and filmmakers

01:47:50 ◼   ► and people like that react over the next several years.

01:47:53 ◼   ► - Well, it's nice to talk about something

01:47:54 ◼   ► a little bit nicer than Trump,

01:47:57 ◼   ► but it inevitably came back to Trump.

01:48:00 ◼   ► (laughing)

01:48:02 ◼   ► My thanks to you for your time.

01:48:05 ◼   ► This was a great discussion.

01:48:07 ◼   ► Everybody can find you on Twitter.

01:48:10 ◼   ► What's your Twitter handle?

01:48:11 ◼   ► - Panzer.

01:48:13 ◼   ► - P-A-N-Z-E-R.

01:48:16 ◼   ► And of course, your good work as the editor at TechCrunch.

01:48:20 ◼   ► Keep up, keep up the good work.